Report: AT&T resumes selling iPhones in NYC

By CNN's John D. Sutter


NEW YORK (CNN) -- AT&T caused a ruckus Monday morning after it reportedly halted online sales of iPhones to New York City residents.

The incident sent Web rumors flying. Some bloggers speculated that AT&T couldn't handle the Big Apple's wireless data traffic. Others blamed an alleged case of fraud, which may have prevented safe online transactions.

AT&T (T, Fortune 500) issued a cryptic statement that seemed to indicate that a marketing campaign or routine change might be behind the online sales blackout to people with New York City ZIP codes.

"We periodically modify our promotions and distribution channels. The iPhone is available in our New York retail stores and those of our partners," said an AT&T statement issued to CNN.

But by Monday afternoon, the issue appeared to have resolved itself. The tech blog Gizmodo reported that AT&T's Web site again was selling iPhones to New Yorkers. CNN also was able to access iPhone sales pages through AT&T's Web site about 3:45 p.m. ET Monday.

AT&T spokesman Fletcher Cook declined to comment on the apparent change.

Earlier in the day, CNN tried to purchase an iPhone while using a New York City ZIP code and was shown this message:

"We're sorry, there are no Packages & Deals available at this time. Please check back later."

When other ZIP codes were entered, the site led to an iPhone sales page.

The sales issue affected only AT&T's Web site; the wireless company continued to sell iPhones and iPhone data service plans through its retail stores, according to the company.

News that New Yorkers were unable to purchase iPhones online from AT&T set off a number of Web rumors, and a few bloggers contacted the company's sales and service representatives for clues.

Laura Northrup, a writer for The Consumerist blog, wrote late Sunday afternoon that she spoke with an AT&T sales representative who blamed the online iPhone sales halt on poor wireless coverage.

"AT&T has apparently found a workable solution to the reported data congestion in New York City," Northrup wrote.

She quoted the AT&T sales representative as saying "the phone is not offered to you because New York is not ready for the iPhone. You don't have enough towers to handle the phone."

Other bloggers found the logic behind that assertion to be questionable, and an exact cause for the stopped sales remained unclear Monday.

Some blamed an alleged problem with fraud.

Writing for the MediaMemo blog, Peter Kafka says an AT&T service representative told him that new iPhones for New York City had to be purchased through a retail store, not through the company's Web site or over the phone.

"AT&T service reps have been telling New Yorkers like myself that it won't sell us the phone online because of fraud problems," Kafka wrote.

He did not elaborate on the nature of the fraud.

PC World's Tony Bradley suggested that the incident is another public relations misstep for AT&T, regardless of its actual cause.

"Cutting off sales of the iPhone in N.Y. alienates a huge pool of consumers and tacitly admits that the critics are right -- the AT&T network can't handle the iPhone," he wrote. "At least, not in New York." To top of page

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