Some are calling for a boycott on the device, while others are suggesting purchasing a phone and withholding payment to prove a collective point.

AT&T's pricing policy for the new iPhone 3G S calls for a $200 fee to existing iPhone 3G users that want to upgrade to the latest model. AT&T charges the fee to subscribers who have not fulfilled most, if not all, of their two-year contract.

The angry smartphone users are using Twitter as a vehicle to lodge their complaints against the wireless carrier. As of Wednesday afternoon, nearly 5,000 people have signed the "twitition" that states, "AT&T should give existing customers the same rate for the new iPhone 3Gs that they do for new customers. New customers or not, another two-year contract is being made."

From Celebration to Outrage

Organizers are encouraging outraged consumers to spread the word about the Twitter petition through other social media sites like Facebook, Delicious, Digg, Reddit and Stumbleupon.

When the iPhone 3G S was announced earlier this week, consumers celebrated price drops on the iPhone 3G. The older model will sell for $99. The new iPhone 3G S will begin selling on Friday, June 19, for $199 for the 16GB model and $299 for the 32GB model -- for new AT&T customers and customers.

Customers who purchased an older iPhone with an current AT&T contract are not eligible for another subsidized phone. Those subscribers would be forced to pay full price for the iPhone 3G S, $399 for the 16GB and $599 for the 32GB model.

Beyond the Twitter petition, consumers are also complaining on other forums, including AT&T's own Apple forum. And the complaints are moving beyond the pricing to include AT&T's network issues.

"AT&T already has exclusive rights to the iPhone. On top of that they gouge the users knowing they can't go anywhere else to get the iPhone," wrote a user named fliptop1. "They have crippled MMS and are delaying tethering while they figure out a pricing scheme. When we are tethered, aren't we just using our cellular minutes that they are already charging us for?"

Does AT&T Have a Heart?

A commenter that calls himself "Agent Provocative" is suggesting a strategy that would force AT&T's hand. As he sees it, AT&T is banking on making a huge profit on the iPhone 3G S even if it makes loyal iPhone customers angry. He calls his solution the "Have a Heart" Project.

All loyal AT&T customers that are brokenhearted over the upgrade pricing, he wrote, should get a new iPhone 3G S on the day it rolls out -- then withhold payment until AT&T provides service of equivalent value to the two-year contract.

"For those loyal AT&T customers, remember to change your account setting to stop all automatic payments to AT&T before getting the new phone. It is your money, AT&T has no rights to steal from you unless you are satisfied with the service they promised to provide. This should be a fair business trade, not a robbery," Agent Provocative wrote.

"If AT&T gets away with it this time by squeezing lightly for $200, they will only squeeze harder next time for $400 when the 4th Generation phone arrives."

AT&T could not immediately be reached for comment on its official policy or the consumer reaction to its iPhone upgrade fee.