The purpose of the contract is to allow you to receive a device from the carrier, and pay for it incrementally over the duration of said contract. You are essentially loaned the cell phone, and at any time if you would like to cancel your plan - the fees you have to pay are in regards to the balance owing for the cell phone. There really is no such thing as a 0$ phone, it's more like 0$ down, you either pay for the phone upfront and you wont be on a contract, or you pay for the device during the 12 month or 24 month period. Hope this helps as well, great post.