Looks like our friend Phil over at WMExperts was right all along, Engadget has the scoop, and it's pretty much what we expected. AT&T thinks their 3G network is just too fragile to handle the iPhone running SlingPlayer:

"Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network. The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service. We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.

Check out the Engagdet link above for the full statement, which includes the hollow flattery of their considering the iPhone less a smartphone and more a computer...

What about Windows Mobile running SlingPlayer, you may ask? Why is that okay? They think it might be too difficult to police hundreds of individuals side-loading the application, whereas the App Store -- controlled totally by Apple -- is only a one phone call ban away.

However, the iPhone is also an unprecedented consumer success with millions of users on AT&T, using never-before-seen levels of mobile data, and proven track record for taking down AT&T's -- again fragile -- network.

Fear is seldom rationale. We're guessing AT&T is banning first, asking questions later. It's much easier to take the heat for preventing it now, then allowing it, seeing Sling adoption rise, network traffic suffer, and taking even more heat for removing it later (or -- gasp! -- having to build out their network reliability faster).

What's your take?