It may be more confusing when you're trying to grandfather in a line, but here's what I understand:
Old method: Pay the subsidized price of the phone, let's say $300. The cost of using that phone per month is $40, plus a $40 activation fee, plus whatever call/text/data plan you have.
AT&T Next method: Pay the full price of the phone, but split up into monthly installments. The monthly price of the phone is dropped from $40 a month to $25 or $15 a month, based on your current data rate. However, I think switching to AT&T Next requires switching your data plan to their current monthly share thing, which determines how much data your entire family shares (no longer per person) and how much monthly the phone access costs ($25 or $15). Someone correct me if I am wrong and that is not required.