Customers in New York City attempting to order an iPhone direct from AT&T's website saw this message over the weekend

While much speculation about this week’s two-day unavailability of the iPhone for those in the Big Apple has often centered on the company running out of capacity, the more likely explanations are far simpler — the regional fulfillment center temporarily ran short after a holiday rush and AT&T wanted to stem the tide of increasing numbers of bottom-feeding eBay resellers doing business in the Tri-State area.

Customers in the New York metropolitan area discovered Saturday they couldn’t order an iPhone from AT&T’s website after entering a New York-area zip code.  Customers were told “we’re sorry, there are no Packages & Deals available at this time — please check back later.”  By Monday afternoon, orders were being processed normally.

The mystery deepened when some blogs began speculating the reason for the order blockade had to do with AT&T’s data capacity in New York City, suggesting the wireless company had reached its limit and halted sales accordingly.  They had the right to speculate if online chats with AT&T sales representatives were to be believed.  The Consumerist found two different explanations during their chats:

Daphne: Welcome to AT&T online Sales support. How may I assist you with placing your order today?

Laura: Hi, I was looking at the iPhone 3Gs and the system tells me that I cannot order one in my ZIP code. My zip code is 11231. (Brooklyn, NY) Is this true? Are iPhones no longer available in New York City?

Daphne: I am happy to be helping you today . Yes, this is correct the phone is not offered to you because New York is not ready for the iPhone.

Daphne: You don’t have enough towers to handle the phone.

Laura: Thank you for your help. So the phone is not available to people anywhere in the city?

Daphne: Yes this is correct Laura.

AT&T didn’t help matters with a non-denial denial issued by AT&T spokesman Fletcher Cook, who said only that the phone company periodically “modifies” its distribution channels. He had no comment about why the company resumed sales.

By not denying the capacity narrative that gained popularity earlier this week, it confirmed it in the popular press, including two local television news reports detailing the ‘sales outage.’

[flv width=”596″ height=”356″]http://www.phillipdampier.com/video/WNBC New York iPhone Sales Stopped 12-28-09.flv[/flv]

WNBC-TV reports on the unavailability of the iPhone in New York and AT&T’s ongoing problems with reception, service, and now PR in the Big Apple. (2 minutes)

With that story feeding the greater narrative that people “love the iPhone, hate the network,” AT&T better get on the phone with Luke Wilson and start taping some new ads.

In reality, Cook’s vague statement is something you’d expect from a spokesman who hasn’t been briefed on what really happened and needed to go with something to placate media speculation.  The data capacity theory would only make sense if the company suspended sales across all channels.  Except they didn’t.  Beyond the post-holiday low inventories found by some shoppers, New Yorkers could still find and purchase the iPhone in AT&T retail stores and through third-party retailers.  One could even order the phone from Apple.  Could unofficial ‘over-eager’ customer service representatives be responsible for the volunteered excuses noted above, either of which would ignite a firestorm of bad press for AT&T?

An increasingly annoying problem confronting cell phone companies is the eBay bottom-feeder and other gray market sales of the popular phone.  Both AT&T and Verizon have had growing problems with resellers who purchase a subsidized smartphone, agree to a two year contract, and immediately cancel it and resell the phone.  And they’ve been cashing in.

AT&T sells a new iPhone 3GS with 16 gigabytes of memory for $199.  When a reseller cancels the contract and keeps the phone, they pay a $175 early termination fee.  That means the phone costs them $374.  They then easily modify the phone to work with other cell phone companies and resell it for upwards of $600 or more on eBay, pocketing a nice $226 in profit.  Demand for the iPhone abroad is high, and considering the value of the dollar remains relatively low, Europeans can snap one up at a fire sale price.  Outside of North America, wireless phone companies don’t discount handsets like the iPhone.

Verizon Wireless has tried to deal with this problem by doubling the early termination fee on smartphones to $350.  That nearly eliminates the profit motive to resell affected phones.

[flv width=”600″ height=”356″]http://www.phillipdampier.com/video/WABC New York iPhone Sales 12-28-09.flv[/flv]

WABC-TV New York calls the latest iPhone mess “salt in the wound” for many New York-area AT&T customers.  (1 minute)