Cause remains uncertain

(Updated with policy reversal) AT&T has temporarily put a stop on online iPhone sales to New York City, multiple reports say. While residents can still buy the device from AT&T retail outlets, as well as Apple Stores, representatives from AT&T are said to be refusing to sell anything more than a refurbished 8GB iPhone 3G, even over the phone. "We periodically modify our promotions and distribution channels," says AT&T spokesman Fletcher Cook.

The reason for the interruption remains unclear. At least two representatives have claimed an unusual level of fraud in New York, without providing any specifics. Another representative suggests that the difficulty is network capacity, in fact that the region does not "have enough towers" to cope with the iPhone.

The carrier's traffic in New York City is known to have severe problems due to the level of iPhone use. Roughly 30 percent of calls are dropped, and the amount of data use is said to frequently overwhelm 3G bandwidth. Similar troubles exist in San Francisco, however, where online sales are so far proceeding normally.

Update: AT&T has resumed sales as of Monday afternoon, observers note. No official explanation has been provided. The quick reversal may however rule out any long-term issues.

by MacNN Staff