This person is correct.
There's nothing illegal about it. Believe it or not any business or store can refuse you business on the grounds that they don't want to do business with you. Because Verizon owns the rights to sell the phone they can choose which plans you have to purchase to have the phone.
IE: You can rent a cable modem from Comcast for $5.00 a month, but they won't rent it to you without internet service ; )

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