AT&T says that NYC doesn't have enough towers to handle the iPhone.
Those if you in New York City trying to get an iPhone by ordering from AT&T online will know that it's just not possible right now. For one reason or another, those trying to buy online using a New York City zip code will find that the iPhone is not available in their area.
The Consumerist did some digging behind such claims and verified that AT&T has frozen online sales of the iPhone in NYC. (It does seem, however, that retail sales are continuing as normal.) The following is an online help desk conversation between the Consumerist's Laura Northrup and AT&T sales support:
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.
This sort of news is startling in light of service complaints in U.S. cities such as NYC and San Francisco – where there are high concentrations of iPhone users.
AT&T responded by issuing the statement, "We periodically modify our promotions and distribution channels," which basically tells us nothing other than confirming that sales have indeed been frozen in NYC.
Update: it appears that New York City is once again ready for the iPhone, as online sales via AT&T's website are now possible again for those living in the city that never sleeps.

I also think they are taking "NY isn't ready" a bit too serious, because it is in fact AT&T that's not ready. It's like someone asking me if I finished building a house and I respond "no the house isn't ready" its not the house fault it's not built it's mine.
Let the rise of the android system to dominance commence!
they already did it for Canada. every wireless carrier here sells the iphone now.
"NYC says AT&T is not ready for the iPhone..."
When you have an area that is extremely densely populated, numerically you don't need as many "towers" to provide signal for the area. Plus they can put "towers" on top of buildings, so terrain and landscape aren't issues.
Where as in more rural type cities, hills and mountains seem to get in the way. And since in other cities growth goes outward (as opposed to up and down) you have to provide more towers to cover the area. It would make sense to me if NYC didn't numerically have a lot of towers. They just have towers crammed with transmitters, etc.