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"b) Does the Iphone6s simply 'replace' the Note3 on my contract and stays at $40 until contract ends, then drops to whatever amount plan specifiies?"
Yes. As others have noted, your contract won't change, you continue paying the same you are now until the contract is complete, you aren't terminating service so there is no ETF. Buying a phone at full retail and swapping it for another phone on your line doesn't affect your contract.
