Maybe AT&T noticed that Verizon got away with a dramatic ETF increase earlier this year and figured why not? Who's gonna stop us? As the article mentions it's still $25 cheaper than Verizon's ETF. Previously it was $175 cheaper. I can't think of any good reason AT&T would want to undercut Verizon on ETF. I suspect this has more to do with the economy than the day-to-day dynamics of the SmartPhone market. Both AT&T and Verizon are probably seeing a lot of customers not fulfilling their 2 year contracts.

The FCC (or congress if needed) really need to examine this situation. I understand the need for the ETF in the context of a 2 year contract a customer signs but I'm deeply opposed to the lack of transparency on the real value of hardware subsidies and the way the cellular industry punishes people with lack of choice if you don't want to sign a contract. Why does an unsubsidized customer typically pay the same (or more) as a subsidized customer? That's just not fair.