We had two kids on our AT&T family plan when AT&T hit us with their smartphone tax. The cost of each kid phone went from @$16/month to $32/month (estimated real costs) and that includes a data plan we don't want.
I think we know why AT&T is making these desperate price hikes, but we're not playing along. After reviewing several options we expect to save about $600 over the next two years with these 3 steps :
- Cancel the phone account for our youngest. Turns out he's not interested in either phoning or texting. He'd prefer we put a fraction of his phone bill into games and movies. In retrospect he could have waited another year. So we've canceled his account -- with a twist. We're porting his AT&T number to Google Voice.
- Replace our $30/month family texting plan with a combination of Google Voice, WhatsApp and Facebook Messenger (yeah, it's still messy).
- Canceled a now useless SmartLimits account.
- Use DataMan Pro to help keep my son under his 200MB/month data limits. We disable Safari and YouTube on his phone, so iTunes is the main data drain. So far he's doing well.
When we canceled #2's phone I decided to salvage the phone number. It's a memorable local number and when I recently added a GV line to my business number there were no local numbers available. I ended up choosing an area code from my former home town - Escanaba Michigan. Since I was going to cancel his phone with a memorable local number, I decided to make it mine.
I followed Google's minimalist number porting directions. Unfortunately you can only do this with a mobile number  - at least for now. Here's how it went:
- In Voice Settings:Phones I clicked the Change/Port link.
- Checked lots of warning checkboxes.
- I tried following the phone confirmation directions on the old Nokia that currently holds my son's SIM card. (We pulled it from his iPhone when we got hit with the rate increase.) It didn't work -- Google couldn't recognize the touch tones!
- I put his SIM into his 3GS -- Google recognized those tones.
- I filled out my AT&T account information.
- I paid $20 into a new Google Wallet account (on my work account)
In theory the transfer will be done in 2-3 days and my old GV business number will work for about 2 months before dying.
In theory my son's AT&T number will disappear and that account will close. I'll check in 2-3 days. Of course since this is a family account things will probably be messier. He's not under any contract (no subsidized phone, he "brought his own phone"), but we'll see what happens. I'll update this post.
 Since we're paying for a data plan (200MB/month).  It's convoluted, but I assume you can move a landline number to a mobile number, then from there to Google Voice. I'm thinking about that ...
 Presumably we could move it to a family mobile account, then from there to Google Voice. Bit expensive and a hassle.
- Testing Facebook Messenger as a texting alternative (4 and 3G)
- iPhone alternatives to AT&T's texting fees
- iPhone on a budget: The AT&T GoPhone PayGo Option
- Giving your old iPhone to your kid: working around AT&T's mandatory data plan
Update 11/22/2011: The next day my AT&T account showed #2 was gone. I tested the number and it called Google Voice. I called AT&T and was told the account had been cancelled. Since AT&T bills monthly service in advance (who new?) I've already paid for the billing cycle that ends in 6 days. There's no rebate on that $12 fee. Any expenses incurred this month (overage fees, long distance) will show up on next month's bill. So this went smoothly.