Can AT&T still bill me if I don't use my sim card?

Let's say I buy an iPhone 5 from AT&T, but I don't use a sim card and it says "No Service" at the top. Will I still be billed? Some of my friends do this, but I want to know if it's possible.

If you bought the phone with a contract - yes they will still charge you every month.

You'll be billed based on your contract.
Most smart phones will work on wi-fi without cell service and essentially become a mini tablet (I have a Driod 3 with no service that I use this way) - but you won't have Phone or Text service, as that's provided via cell service.
So, unless you cancel your contract, you'll still be billed regardless of usage.
No contract, no phone/text service - but Wi-Fi should be fine.

FYI, I have 13 years in wireless telecom. I hate the contracts and billing practices too. But, it is what it is - and they have the money to make it their way…