The number on the Alltel phone still has the connection to that phone versus the iphone. So if I were you, try to reset the Alltel phone. If that doesn't work, re cancel your line for the Alltel service and try again.
I'm not an expert. But by what you have said, its obvious that the old phone still has the number activated to that specific phone. Therefor the iPhone isn't picking up on the new service.
If all fails, talk to both Alltel and AT&T and see if they can fix it for you.
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