Simo sent in this image he took at a Microsoft Store in McLean, Virginia (Washington DC suburb). You can see the Nokia Lumia 710 is available there for free with a qualifying plan.
I’m not sure what that plan is. In the UK, free phones on contracts are common place (even for new phones), but the plan normally goes up. Contracts aren’t for everyone but they make sense for folks who use up a lot of calls/txt/data or just prefer to have the price of the phone subsidized by more manageable monthly payments.