What should I do about my Cingular/ATT bill?

Almost two years ago, I got behind on my Cingular bill by a couple months and they shut my phone off. It had only been turned off a couple weeks when I got the money to pay it. I called and told the Cingular rep that I wanted to pay my bill and get my phone turned back on. She processed my payment, then told me that I would have to pay another $200 to get my phone turned back on. I then told her that I wasn't going to do that, so she then told me that I had to pay a $250 early termination fee since I wasn't going to pay the $200 to get it turned back on. That sounds like extortion to me. I paid my bill in full, so my options were either pay to have it turned back on, or pay to not have it turned back on. Now I have debt collectors calling me about this everyday and I refuse to pay the $250. Am I wrong to think this is ridiculous? Is there any way to settle this?