A free upgrade that wasn't

I received an e-mail from AT&T in August of 2014 offering a free upgrade for an older iPhone that is on my account, from a 3Gs to a 4S. It stipulated that it would require another 2 year contract commitment which was fine. I called AT&T to take advantage of this and spoke to someone in the Philippines. Due to what they said were technical difficulties, a supervisor had to complete the transaction. We received the phone and was happy with the outcome until I received my bill. The new contract removes a $25 discount from that phone's monthly fee and replaces it with a $5 discount and I was also charged a $40 upgrade fee. At no time when I was ordering the phone or reading the e-mail was I informed of these charges. The difference in the ongoing monthly fee alone amounts to $240/year for the free offer! What a racket AT&T has going. If I did this in my business without disclosure, I wouldn't be in business long. I called AT&T and again was connected to someone in the Philippines who said she couldn't do anything about it. I asked to speak to her supervisor but she said he was busy and couldn't come to the phone. When I asked to speak to someone in the U.S., she said she would put me back into the queue. When she did, she disconnected me. Luckily, when I called back, I was able to speak to someone in the U.S. This person was able to resolve my issue and I am grateful for her help. This person had empathy for my situation and understood my concerns. She told me that by reducing the monthly discounted amount, AT&T is incentivizing customers to not renew 2 year contracts but to have them pay for their phones in monthly installments that amounts to many more dollars to AT&T over the long run. I don't pay for anything with installments. This is not an incentive but a penalty imposed to make a commitment to stay with AT&T for at least 2 more years. Who makes these decisions? The CEO and management need to think up other schemes to satiate their greed (maybe with better customer service besides) than to bait and switch promotional offers.