What they really want is to screw all the old long time AT&T customers into new two year contracts with less favorable rates.
It doesn't have to do with TDMA/GSM, they want to get rid of the AT&T contracts. This is contrary to what they said they would do during the takeover. You can find a lot of people with stories related to this being the case if you search around.
That's exactly what we did for my sister, she had a 300+ "anytime" minutes plan (probably free nights & weekends, I don't know) plan. She, in actuality used about 15-30 minutes/mo tops and paid around $30 for it. Cingular was making $ on her, no doubt, and as a 6-7 year customer they are idiots to let people like this leave. They wouldn't budge on converting to GSM (even though we had our own phone already) without a two year contract and change of the plan. We sh*t canned them ASAP and ported the number to T-Mobile ToGo, now after $100 topup card the balance is good for a year (with further topups extending the balance another year, regardless of topup denomination). It works out to be about $8/month (or less) at the rate she uses her phone.
Unless you have strong reasons to stay with them, vote with your feet, dollars, and number portability!
The definitive answer is: If you were an former AT&T customer acquired through the buyout, the really do not care to keep you around under the status quo. You'll get worse treatment than any new customer off the street.
I would trust the telephone customer service reps about as far as you can throw them, I hope you recorded the call if you plan to go off of what they have told you.
There have been people who say that now you can get them to waive the early termination fee if it was an AT&T contract and you switch to Cingular. Now, apparently after you do that you have the "30 day trial" under the new Cingular contract and if you cancel it within this time you're done (i.e. no fee from the AT&T contract and no ridiculous new two year Cingular contract that you were bullied into). I can't confirm this from experience as my sister was well out of contract by about 4-5 years when we ported her number and got the hell out of Cingular.
[TELECOM Digest Editor's Note: I am going to be watching the bill very closely this month and next to see how they deal with it. PAT]