No, the iPod touch is NOT a "phone". Activation is via Apple's iTunes website. You are confusing this mobile device with the iPhone. Both are WiFi enabled, however the iPhone also supports Internet access via ATT cellular network called "EDGE". To access the Internet from a WiFI device, you can do so with the iPod touch either via a wireless home network, or a public hotspot, such as in most McDonald's restaurants and Starbucks. If you are an existing ATT DSL Internet subscriber, you can gain basic service hotspot access "free" via the ATT WiFi network. All you need to do is take your iPod touch to within 150 feet of one of these establishments and select "AttWiFI" as the Network SSID to connect to, then launch your iPod touch Safari browser and try to connect to any Internet website. In the process, Safari will be redirected to the ATT WiFi network access login home screen. Enter you existing ATT DSL subscriber user name and password. If you are NOT already an ATT DSL Internet subscriber, you can still gain public hotspot WiFi Internet access but first you will have to sign up for an account and pay a monthly charge. You can also login by redeeming an ATT gift (or prepaid) card, or paying for limited access with I believe is around $8 per day, or 3 or 4 bucks per two hour session. Of course, there is nothing about any of this in Apple's user guide for the iPod touch. But, for such a WiFi intensive mobile device, this is the kind of thing people need to know to use their iPod touch to its full potential wherever you go.So, we are not sure if this will be what Nicole will get. Ideally we would love to get her iPhone but we already are paying for Verizon cell phone contract (that still has a year to go).