With the high base price of the iPhone and AT&T deciding not to subsidize the cost of the phone, the cost of owning one when it comes out is pretty steep. If for some reason you decided to cancel your subscription early, it gets even more expensive. How expensive? Try an additional US$ 175.

It was recently announced that AT&T has decided to place a US$ 175 fine for those who decide that they want out of the two-year contract with the company. This move has sparked the outrage of many an iPhone fan interested in picking up a unit.

As most would know, when people cancel their subscription to a cellular service they have to pay a fine. The reason for this is because the company sells the phone for a cheaper price and subsidizes the cost over the two years or more as dictated in the contract.

AT&T spokesman Mark Siegel gave word that these termination fees pay for more than phone subsidies. His exact explanation for this is that "there are certain fixed costs we incur in serving every customer who establishes service with us." However, he declined to specify exactly what these costs were.

The Vice President of Jupiter Research in New York Michael Gartenberg spoke about this issue and gave a theory on why this was the case. Considering that other networks do sell music through their wireless service, iTunes will be getting revenue that AT&T could have gotten.

However, he also noted that while this may be the case, those who will be adopting the iPhone are those who will most likely be using more data and voice services, which would give a nice boost to AT&T as well.

Is AT&T trying to milk more money out of this deal? It wouldn't have been so bad if they didn't charge such a huge amount for the cancellation considering the simple fact that you're already paid for the entire phone out of your pocket. I believe it's time for AT&T to decide on having one or the other. If they choose to subsidize it, I doubt many will complain but asking for both is pretty excessive in my book.