I'm glad the net neutrality dispute that broke out this week between AT&T (T) and Google (GOOG) has nothing to do with Apple (AAPL).

The two companies' arguments are so cynically self-serving and the common carrier issues they have locked horns over so thorny and impenetrable that I don't know where to start. (If you want to pursue it, the New York Times' Saul Hansell does a good job laying the groundwork in his latest Bits column.)

But there's one thing in AT&T's letter to the Federal Communications Commission that deserves comment, and it has nothing to do with intercarrier compensation, call termination fees or pornographic chat lines. It concerns the English language.

In his carefully footnoted letter to Sharon Gillett, chief of the FCC's wireline competition bureau (with copies to the four FCC commissioners and chairman Julius Genachowski), AT&T senior vice president Robert W. Quinn Jr. refers to Google as

"one of the most noisome trumpeters of so-called 'net-neutrality' regulation."

I can just hear the screams of anguish from high school vocabulary teachers all across the country.

Like them, I'm delighted that Bobby Quinn remembers that the word "noisome" exists. But I can't believe he made the classic rookie mistake about its usage.

Noisome, from the late Middle English "noy" (short for annoy) means having an extremely disagreeable smell.

It has nothing to do with noise, trumpets or, for that matter, net neutrality.

See here for a copy of AT&T's letter and here for Google's response.

Image: FCC

"Contrary to published reports," Apple (AAPL) told the FCC back in August in response to a government inquiry about why it rejected Google's (GOOG) famous voice management app. "Apple has not rejected the Google Voice application, and continues to study it.” (link)

What Google had to say about that was unknown because unlike Apple, which made public its response, Google asked that key portions of its letter to the FCC be kept confidential to protect "sensitive commercial conversations" between the two companies.

Now Google has spilled the beans. In a blog post Friday, Google attorney Richard Whitt announced that rather than fight several Freedom of Information Act requests, the company asked the FCC on Thursday to release the unredacted version of its letter.

You can read the full letter on the FCC's website, but the thrust of the previously undisclosed passages is that Apple's top marketing executive personally told Google that its app had been rejected. The key section is this one:

"The primary points of contact between the two companies were Alan Eustace, Google Senior Vice President of Engineer & Research, and Phil Schiller, Apple Senior Voice President of Worldwide Product Marketing. On July 7, Mr. Eustace and Mr. Schiller spoke over the phone. It was during this call that Mr. Schiller informed Mr. Eustace that Apple was rejecting the Google Voice application for the reasons described in 2(a)."

[The reason offered in 2(a): "because Apple believed the application duplicated the core dialing functionality of the iPhone."]

Not only does Google's version of events flatly contradict Apple's, but its letter provides names and dates that could presumably be supported by phone records.

For what it's worth, Google's letter also supports the version promulgated by TechCrunch's Michael Arrington, who, citing sources at Google, had pronounced Apple's public response "untrue," "misleading," and "a total lie."

In response to a request for comment about the specific passage quoted above, Apple spokesperson Steve Dowling replied instead: "We do not agree with all of the statements made by Google in its letter. Apple has not rejected the Google Voice application.  We continue to discuss it with Google."

Dowling declined to specify which statements the company does or or doesn't agree with.

See also:

• What did Apple and Google talk about for three weeks in July?
• Arrington to Apple: Liar liar pants on fire
• The FCC is asking Apple and AT&T all the right questions

Image: Apple Inc.

It took the heavy hand of the Federal Communications Commission to pry it loose, but we finally have a clearer picture of how Apple's (AAPL) App Store approval process works.

The details are contained in Apple's response to the FCC's July 31 letter of inquiry into why Google's (GOOG) Google Voice app has not been approved. AT&T's response fills 16 pages with legalese and footnotes, but the bottom line is short and sweet: it wasn't us.

Apple's response is a little more artful, starting with a six-paragraph preamble about revolutionary interfaces and seamless user experiences.

When it finally gets around to the FCC's first question — why  was Google's app rejected? — Apple claims that contrary to published reports, Google Voice it still "under consideration," although the app as Apple describes it does such violence to those revolutionary interfaces and seamless user experiences that it seems unlikely the thing will ever see the light of day, except perhaps as a Web app.

The meat of the document, however, comes later, in answer to the FCC's question "what is the approval process?" Apple's reply tells us more about how the machinery works than we've learned in a year of hits, misses and developer hissy fits.

The procedure, as the company describes it:

• Apple looks at every app it receives — 200,000 so far — pouring in at the rate of 8,500 new apps and updates per week.
• The company employs 40 full-time reviewers; at least two reviewers study each app.
• Apple has established — it doesn't say when — an App Store executive review board that sets policy and reviews app that have escalated to the board because they raise new or complex issues.
• Apps are reviewed for just what you'd expect: bugs, instabilities, privacy violations, stuff that little kids shouldn't see.
• Apps are also reviewed for the stuff that gets to the heart of the matter: use of unauthorized protocols and "applications that degrade the core experience of the iPhone." This presumably covers Apple's contractual obligation not to overtax AT&T's (T) fragile 3G network with TV or VOIP.

Apple says its reviewers spend most of their time making sure the apps function properly and working with developers to fix bugs and quality issues.

Arrington to Apple: Liar liar pants on fire

But the amount of time they spend is pretty limited. CNET's Erica Ogg has done some quick back of the envelope calculations and determined that 40 people looking at 8,500 apps and updates during a regular five-day week works out to something like six minutes per app per reviewer.

No wonder these guys make, as Apple concedes, "occasional mistakes." It's a wonder they get anything done at all.

See also:

• The FCC is asking Apple and AT&T all the right questions
• Group asks FCC to probe iPhone Skype restrictions
• AT&T: We didn't ask Apple to block Google Voice
• Dancing on AT&T's grave in the Wall Street Journal

AT&T stayed mum for weeks to protect its relationship with Apple, but thanks to prodding from the Federal Communications Commission the company is talking now. The upshot: AT&T didn't demand that Apple (AAPL) block Google Voice from the iTunes App Store, thus keeping it off of the iPhone. In fact, AT&T says it didn't even talk to Apple about it before the iPhone maker handed down the decision.

This is the impression I got when I talked to sources close to AT&T (T) after the incident blew up. As I suggested here, Apple probably did the blocking on its own, for fear that Google Voice (GOOG) would take over the iPhone. To my amazement, AT&T refused to talk about the Google Voice controversy on the record, even to clear its name. That's how much the carrier wants to avoid ticking Apple off.

AT&T's response to the FCC is a 16-page missive from the desk of legislative affairs chief James Cicconi, which I've linked here. There are a few interesting nuggets in it.

For instance, AT&T says it rarely talks to Apple about what apps will be allowed in the store. Exceptions: streaming audio apps from Pandora and AOL, which threatened to cause congestion on AT&T's 3G network. Apple tweaked its streaming technology to make them less of a burden. They also talked about an app from MobiTV and CBS that streamed video of the NCAA tournament. AT&T, again concerned about 3G network congestion, raised it with Apple, and Apple had MobiTV and CBS modify the app so that the video streaming would work only via WiFi connections. Of course, AT&T and Apple have also talked about voice-over-IP, or Internet telephony apps – the two companies have agreed that Apple won't approve any VoIP apps that run over AT&T's network, unless AT&T agrees. (Google Voice does not use VoIP over AT&T's network.)

So it looks like Apple blocked Google Voice on its own, possibly concerned that Google's software could take over the iPhone's core functions. From what I've seen of the Google Voice app for Google's rival Android smartphone platform, Apple's concerns are founded. The Android app works beautifully, allowing users to place Google Voice calls directly from the phone's normal dialer. The caller ID of the person receiving the call shows the Google Voice number. It turns phone calling – arguably the primary feature of any phone – into a Google experience.

It will be fun to read Apple's response to the FCC, which I haven't seen yet.

UPDATE: Apple's response to the FCC has just come out, and it's a doozy. See it here. The gist of it is, Apple claims it hasn't actually rejected Google Voice; it's still studying it. It says it rejected the initial version because it duplicates features Apple built itself. Google's response is also out; read it here.

In case you don't want to wade through AT&T's 16-page response to the FCC, below is AT&T's statement about it.

AT&T Statement on Letter to the FCC Regarding Apple App Store

WASHINGTON, DC – On July 31, 2009, the Federal Communications Commission (FCC) issued letters to Apple, AT&T and Google with a series of questions about the Google Voice app and Apple’s App Store approval process.  AT&T today responded to the questions raised in the FCC’s Wireless Telecommunications Bureau letter.   The following statement may be attributed to Jim Cicconi, AT&T senior executive vice president, external and legislative affairs:

“We appreciate the opportunity to clear up misconceptions related to an application Google submitted to Apple for inclusion in the Apple App Store.  We fully support the FCC’s goal of getting the facts and data necessary to inform its policymaking.

“To that end, let me state unequivocally, AT&T had no role in any decision by Apple to not accept the Google Voice application for inclusion in the Apple App Store.  AT&T was not asked about the matter by Apple at any time, nor did we offer any view one way or the other.

“AT&T does not block consumers from accessing any lawful website on the Internet.  Consumers can download or launch a multitude of compatible applications directly from the Internet, including Google Voice, through any web-enabled wireless device.  As a result, any AT&T customer may access and use Google Voice on any web-enabled device operating on AT&T’s network, including the iPhone, by launching the application through their web browser, without the need to use the Apple App Store.”

The Wall Street Journal's editorial board and I disagree about almost everything, including the legacy of the late Robert Novak.

The op-ed page, however, is a different matter. And on Tuesday the Journal ran a guest commentary by Andy Kessler that says what many of us have been thinking about AT&T's (T) role in Apple's (AAPL) rejection of Google's (GOOG) Google Voice app — the universal telephone number and voice mail system the telcos should have offered us years ago. (See here.)

Like most observers, Kessler, a former hedge fund manager, blames AT&T for forcing Apple's hand, and he doesn't mince words. [UPDATE: In letters to the FCC, Apple and AT&T make it clear that it was Apple that decided not to accept the app, no AT&T. See here.]

"What this episode really uncovers," he writes, "is that AT&T is dying … cling[ing] to the old business of charging for voice calls in minutes."

Unlike, we imagine, the Journal's editorial board, Kessler welcomes the intervention of the FCC and its new Chairman Julius Genachowski, arguing that the United States can't just rethink its communications policy — even that is obsolete. What we need, he says, is a new national data policy, and he offers four suggestions:

• End phone exclusivity. Any device should work on any network. Data flows freely.
• Transition away from "owning" airwaves. As we've seen with license-free bandwidth via Wi-Fi networking, we can share the airwaves without interfering with each other.
• End municipal exclusivity deals for cable companies. TV channels are like voice pipes, part of an era that is about to pass.
• Encourage faster and faster data connections to our homes and phones. It should more than double every two years.

"Data is toxic to old communications and media pipes," Kessler writes. "Instead, data gains value as it hops around in the packets that make up the Internet structure."

He's calling for nothing less than the end of the 135-year-old Alexander Graham Bell era. And not a moment too soon.

Google Voice. Art: Google Inc.

[NEWS FLASH: Google CEO Eric Schmidt has resigned from Apple's board. See here.]

Sometimes you've just got to love the government.

Case in point: the inquiry that the U.S. Federal Communications Commission launched Friday into why exactly Apple (AAPL) decided to reject Google's (GOOG) powerful Google Voice call-management system for the iPhone, and what role AT&T (T) played in the decision.

Hundreds of reporters — from the tiniest blogs to the most powerful national newspapers — have been trying since Tuesday to get to the bottom of the story and have run into the same brick wall. The problem is, none of these companies are under any obligation to answer their pesky queries.

But companies do have to answer to the FCC if they want to provide telephone service in the United States. And on Friday, letters sent to Apple, AT&T and Google asked all the right questions. (You can read them yourself below the fold.)

But first, a bit of background.

The reason everyone is making such a fuss about Google Voice is that it solves — in theory, at least — so many of the problems created by modern telephony.

Google Voice started life in 2005 as GrandCentral, a company that offered a single unified life-time phone number in the area code of your choice that would ring all your phones — home, cell, work, vacation home, etc. It also unified your voice messages, putting them in a single voice mailbox on the Web. And it let you tweak the system to your heart's content, setting up different away messages for different callers, blocking telemarketers and collection agencies, choosing to ignore, erase or listen in on incoming messages, and so on.

Google bought GrandCentral in 2007 and seemed content to let it rot, as GigaOm's Judi Sohn put it her widely reposted January editorial “Will the Last One to Leave GrandCentral Please Turn Out the Lights?” But it turned out that Google had been secretly working on it all along, and in March it unveiled a new and improved version — redesigned and renamed Google Voice — with some brand new features, including free conference calling, dirt-cheap international calls and various tricks for turning voice mail into e-mail,

As David Pogue put it in his New York Times review: "If Google search revolutionized the Web, and Gmail revolutionized free e-mail, then one thing’s for sure: Google Voice, unveiled Thursday, will revolutionize telephones."

Group asks FCC to probe iPhone Skype restrictions

All of which helps explain what there was such outrage earlier this week when iPhone users learned that Apple had formally rejected the Google Voice application and was systematically removing from the App Store any Google Voice-related apps that had already been approved.

"Until recently, Apple has managed the store in a generally benevolent, if not somewhat incompetent manner," wrote TechCrunch's Jason Kinkaid in Apple Is Growing Rotten To The Core. "But now things are taking a turn for the worse."

Why did Apple reject the Google Voice? Did it do it for its own reasons, or did AT&T twist its arm? If so, why does AT&T support Google Voice for its BlackBerry users? What is the nature of Apple's relationship with AT&T? Or, for that matter, with Google? And how, exactly, does this whole App Store approval process work?

The FCC asks all these questions and more in the letters linked to below. The agency has a mandate to make sure telephone service is available to all Americans who need it, even in remote rural areas.

It has launched a broad investigation into the kind of exclusive deals that have, for example, let Apple sell iPhones to AT&T's customers but not Verizon's (VZ).

We wish them them well.

• FCC’s letter to Apple.
• FCC’s letter to AT&T.
• FCC’s letter to Google.

To learn more about  Google Voice, see the list of features here or watch Google's You Tube video, pasted below.

It didn't take long for Skype's free application for Apple's (AAPL) iPhone to climb to the top of the App Store bestseller list — nor for net neutrality advocates to cry foul over the restrictions placed on its use.

In the first two days after its release, the iPhone Skype app has been downloaded more than a million times — about six downloads per second, according to Skype's official blog.

The application allows iPhone and iPod touch owners to make free and low-cost international calls over Wi-Fi networks. But in deference to AT&T (T), the iPhone's exclusive carrier in the U.S. market, Apple blocks Skype calls made over AT&T's cellular networks. That makes Skype useless for telephony when it's out of range of a Wi-Fi network.

And that's what has the open-Internet advocacy group Free Press crying foul. Arguing that the airwaves should be treated by the same common carrier standards applied to telephone wires, it has asked the Federal Communications Commission to investigate whether Apple and AT&T have violated federal rules.

According to the Wall Street Journal, such a request might get a more sympathetic hearing from the new administration that it would from the old. As a candidate, President Obama expressed support for the principles of net neutrality, and his choice for FCC chairman, Julius Genachowski, is said to have helped Obama craft his position on the matter. (link)

AT&T has declined to comment, and since Apple never comments, it didn't either.

See also: Skype by the numbers

For Apple (AAPL), the transition from the 2G (or 2.5G) iPhone to the 3G iPhone is a tricky one.

We know the new model is coming sometime in 2008. Steve Jobs hinted as much in September, and AT&T's (T) Randall Stephenson confirmed it last month.

The problem for Apple is that it must get formal FCC approval before it releases any new radio-based device. Such applications are public documents, which makes it hard to keep a new cellphone secret for very long.

Jobs unveiled the original iPhone six months before it shipped. If he announces the 3G iPhone ahead of time, he risks choking off sales of the 2G model.

What to do?

The stock traders at The Mac Observer's Apple Finance Board have started speculating about how Apple might handle this delicate transition. One of the moderators, a Devon-based investor who calls himself sleepygeek (and uses those quaint British spelling conventions), offers a few ideas:

1. innovative confidentiality agreements with approval agencies.
2. No change in appearance – so that those encountering the device in advance don't realise it has new hardware.
3. Covert hardware upgrades (like macbook 802.11n) so that iPhones sold in the weeks before announcement already have the important new hardware.
4. Trade in programme – those on contract (and generating revenue share) can trade-in the old iPhone and start a new 2-year contract.
5. price/model alternation (similar to macbook/macbook pro): new features are announced on a much more expensive model, which becomes the standard at the standard price at the next model change. (link)

How do you think Steve Jobs ought handle the 3G introduction?