AT&T Contract Terminating?

I just got a message saying that AT&T is updating my plan by adding a tethering plan ($45/mo. incl. 4GB). I really do not want this to happen as it will increase the cost. How can I terminate the contract and if I do, will I have to pay the early termination fee? I've had my contract for about 1 year right now. And if I do terminate, what other carrier should I transfer to? I currently have an iPhone 3Gs and I've heard you can't use AT&T iPhone with Verizon. Is this correct? Please help! Thanks.