Yesterday, A group of House members from rural districts called on the Federal Communications Commission to investigate Google’s practice of blocking calls to numbers that use rural exchanges to charge inflated prices–something regulation prevents traditional telecom carriers from doing.

In their letter to the FCC, the lawmakers–among them Reps. Steve Buyer (R., Ind.), Charlie Melancon (D., La.), Michele Bachmann (R., Minn.) and John Barrow (D., Ga.)–claim that rural consumers will be harmed if Google is allowed to “evade compliance with important principles of access and competition.”

“We understand Google has asserted Google Voice is not a ‘traditional’ telephone service–despite its use of 10-digit telephone numbers and its ability to connect calls between telephones through a local exchange carrier,” the lawmakers wrote in the letter. “Instead, Google maintains it ought to be allowed to block calls to rural telephone exchanges–a position we find ill conceived and unfair to our rural constituents.”

This, of course, is pretty much what AT&T (T) said in September when it slagged Google (GOOG) as “one of the most noisome trumpeters of so-called net-neutrality” and asked the FCC to order it to “play by the same rules as its competitors.” Google, however, insists those rules don’t apply in its case.

“The FCC’s open Internet principles apply only to the behavior of broadband carriers–not the creators of Web-based software applications,” Google telecom counsel Richard Whitt wrote in response to AT&T’s complaint. “Even though the FCC does not have jurisdiction over how software applications function, AT&T apparently wants to use the regulatory process to undermine Web-based competition and innovation.”

Overall, I believe Snow Leopard will help keep the Mac an appealing choice for computer buyers, and I can recommend it to existing Mac owners seeking more speed and disk space, or wanting to more easily use Exchange. But I don’t consider Snow Leopard a must-have upgrade for average consumers. It’s more of a nice-to-have upgrade. If you’re happy with Leopard, there’s no reason to rush out and get Snow Leopard.

– Walt Mossberg, The Wall Street Journal

The changes here are modest, and the performance gains look promising but beyond the built in apps, just a promise. If you’re looking for more bells and whistles, you can hold off on this upgrade for at least awhile. But my thought is that Snow Leopard’s biggest feature is that it doesn’t have any new features, but that what is already there has been refined, one step closer to perfection. They just better roll out some new features next time, because the invisible refinement upgrade only works once every few decades.

– Brian Lam, Gizmodo

Here’s the thing about Snow Leopard, the single inescapable fact that hung over our heads as we ran our tests and took our screenshots and made our graphs: it’s $30. $30! If you’re a Leopard user you have virtually no reason to skip over 10.6, unless you’ve somehow built a mission-critical production workflow around an InputManager hack (in which case, well, have fun with 10.5 for the rest of your life). Sure, maybe wait a few weeks for things like Growl and MenuMeters to be updated, and if your livelihood depends on QuickTime you might want to hold off, but for everyone else the sheer amount of little tweaks and added functionality in 10.6 more than justifies skipping that last round of drinks at the bar–hell, we’re guessing Exchange support alone has made the sale for a lot of people.

– Joshua Topolsky, Engadget

Snow Leopard is Apple’s lowest-priced OS update in eight years. Granted, it’s a collection of feature tweaks and upgrades, as well as under-the-hood modifications that might not pay off for users immediately. But the price of upgrading is so low that I’ve really got to recommend it for all but the most casual, low-impact Mac users. If you’ve got a 32-bit Intel Mac (that is, one powered by a Core Solo or Core Duo processor), the benefit of this upgrade will be a little less. But for most Mac users, especially the kind of person who reads a Web site devoted to the subject, the assorted benefits of Snow Leopard outweigh the price tag. I’d pay $30 just for the improved volume ejection, the ability to create services with Automator, and the improvements to the Dock and Exposé–though I admit I’d pay slightly more to not have the misguided QuickTime Player X as a part of the package. If you’re a user who connects to an Exchange server every day, upgrading to Snow Leopard really is a no-brainer. For everyone else, maybe it’s not quite a no-brainer-but it’s awfully close. Snow Leopard is a great value, and any serious Mac user should upgrade now.

– Jason Snell, Macworld

Impressive and important, it’s an update that will revitalize your existing Mac even though you’ll be stumped for a quick five-minute demo that convinces the people around you that much of anything has changed at all.

– Andy Ihnatko, Chicago Sun Times

In my experience, Mac OS X was already a superior operating system to Windows. With Exchange and other technologies, Snow Leopard adds bite, especially for business. But as upgrades go, this one is relatively tame.

– Ed Baig, USA Today

If you’re already running Leopard, paying the $30 for Snow Leopard is a no-brainer. You’ll feel the leap forward in speed polish, and you’ll keep experiencing those ‘oh, that’s nice’ moments for weeks to come. If you’re running something earlier, the decision isn’t as clear cut; you’ll have to pay $170 and get Snow Leopard with Apple’s creative-software suites–whether you want them or not. Either way, the big story here isn’t really Snow Leopard. It’s the radical concept of a software update that’s smaller, faster and better–instead of bigger, slower and more bloated. May the rest of the industry take the hint.

– David Pogue, New York Times

Now this is just getting silly.

Pali Research says sales of the Palm Pre are slowing. RBC’s Mike Abramsky says they aren’t and claims 325,000 to 375,000 have been sold to date, ahead of his expectations.

Citing some decidedly unscientific poll data, Jesup and Lamont analyst Kevin Dede suggests the device is plagued by build-quality issues and a high exchange/return rate, potentially 40 percent. Abramsky says it’s between two and three percent and calls BS on the build-quality issue.

“Most buyers appear delighted with their new Pre user experience,” Abramsky said in a research note Friday. “Pre satisfaction appears higher than legacy Palm devices (e.g., Treo), affirming improved execution from the ‘New’ Palm, including engineering, manufacturing, quality and process improvements.”

So, Pre sales are slowing. Or, they’re not.

And exchange/return rates are high.

Unless they’re not.

And these analysts are on point.

Unless, of course, they’re not. Too bad it’s impossible to tell without official numbers from Palm (PALM) or Sprint (S).

Launched in early June, the plug-in provided a way to run Microsoft Outlook on Google Apps instead of Microsoft Exchange. Sadly for Google, the plug-in didn’t play well with Outlook, most notably making its data inaccessible to Windows Desktop Search. Now, after a few weeks of troubleshooting and some help from Microsoft (that must have made for some interesting conference calls), the company has found a solution to the problem and a fix has been released.

“We worked closely with Microsoft to address two issues that we shared recently, and we appreciate their help,” Google Apps Senior Product Manager Chris Vander Mey said in a company blog post Tuesday. “The Windows Desktop Search feature now works, so you can choose between the native Outlook search, which has been available since launch, and Windows Desktop Search to find information in Outlook.”

With that little snafu resolved, it’s now back to business for Microsoft (MSFT) and Google (GOOG), with the former attacking the latter’s search business and the latter steadily encroaching on the former’s software turf. We now return you to our previously scheduled hostilities…

“The installation of the Google Apps Sync plugin disables Outlook’s ability to search any and all of your Outlook data,” Microsoft explained in a post to the Outlook Team blog. “When a Google Apps user installs the sync plugin for Outlook, the plugin modifies a registry key which disables Windows Desktop Search from indexing and providing search functionality for all Outlook data, not just the Outlook data being synchronized from GMail. Because Outlook search relies upon the indexing performed by Windows Desktop Search, Outlook search functions are broken as a result. It is also important to note that uninstalling the plugin may not fix the issue.”

Uh-oh. Good luck finding that budget-request email you sent to your CFO a few months ago….

Google (GOOG) is working with Microsoft (MSFT) to resolve the issue, but the damage may have already been done. Enterprise is notoriously reluctant to embrace change specifically because of cock-ups like this. Enterprise likes familiarity. It likes seamless change. With Apps Sync for Outlook, Google provided the former, but it fell short on the latter. And that may inspire some companies that had been considering Apps Sync for Outlook to stick with Exchange for a while longer.

Google Apps Sync for Microsoft Outlook, for one thing. The App allows users to sync Outlook with Apps, just like Outlook natively syncs with Exchange. Offers fast email sync with Google-native protocol, full calendar and contact sync, as well as global address autocomplete and search and free/busy information support.

Pretty slick. Google (GOOG) has essentially recreated the Outlook GUI within Apps. Seamless integration. Works offline. Same familiar Outlook experience. Use Gmail and outlook simultaneously. Everything is supported natively and, as the demoer notes, “your data is safe, it’s with Google.” Well, that’s one way to look at it.

Google Apps Sync for Microsoft (MSFT) Outlook is available today as part of the company’s Premiere Apps. It’s available for Windows only.

A few quick case studies: Avago rep says this represents the “last hurdle” for users to get over migrating away form Exchange. The feedback we’ve gotten is that this looks “exactly the same” as Exchange. Genentech (DNA) rep relates a similar experience. “It looks like a native Outlook experience. The average has no idea we switched out the back-end…We anticipate widepsread adoption.”

Dave Girouard, president of Google’s Enterprise division: “I bet you never imagined you’d see Google demonstrating Outlook for you all, so this is a first.”

In a year, Google Apps will be “night and day from what they are today.” That’s what Dave Girouard, president of Google’s (GOOG) Enterprise division, told attendees of the Bank of America and Merrill Lynch Technology Conference last week.

Today, we’ll likely find out whether that was truly a foretelling of things to come or more Google braggadocio. At an event in San Francisco, Google is expected to discuss the future of its productivity suite and some enhancements that may begin to close the gap with Microsoft (MSFT) Office, something the company desperately needs to do if it wants to make deeper inroads in the enterprise area.

As Girouard himself admitted last week, Apps still has a ways to go. “Gmail is really the best email application in the world for consumers or business users, and we can prove that very well,” he said. “Calendar is also very good, and probably almost at the level of Gmail. But the word processing, spreadsheets and other products are much less mature. They’re a couple of years old at the most, and we still have a lot of work to do.”

In a few hours we’ll learn just how much work has been done and how much is left. Join us for live coverage beginning at 10 a.m. PDT (1 p.m. EDT).

• The title of this morning’s presentation is “Google Apps: The Enterprise Cloud.” Presiding over it, Andrew Kovaks from Google’s cloud computing team and Dave Girouard, president of Google’s Enterprise division. According to the schedule provided, it will feature a CIO roundtable discussion as well as some new product demos.
• Girouard kicks things off with a quick overview of the business. Google is a 10-and-a-half-year-old company, he says, adding that Google Apps is about half as old as that. “We’re about five, five-and-a-half years into this initiative.”
• Girouard says the current recession has made cloud computing more urgent, more necessary. “This has been a really difficult environment. Everyone is feeling it and we need to respond…It’s important to invest in difficult times, especially during times when everything is telling you to cut back.” Great companies thrive during downturns, he notes, adding that Google is investing in Apps, because the company views it as an area the company can grow into for quite some time to come.
• Looking backwords for a moment, Girouard notes that this particular side of Google’s business was born out the company’s search app and then Gmail. Gmail, he adds, was initially conceived as an internal app before it was rolled out to the consumer market.
• A few interesting data points:

  –70 percent of the universities in the U.S. are in the process of outsourcing or moving their email to a cloud computing solution.

  –Google now has 1.75 million businesses on Google Apps.

  –It has more than 15 million active ursers.

  –Dozens of Apps customers with more than 1,000 employees.

• Increasingly, larger companies are moving to Google Apps. Among them, Genentech (DNA), the first large business to “go Google.” A Genentech rep is on hand to talk up the company’s experience which, obviously, was a positive one.

  Also, a recent advocate of Google Apps, Avago–the first company with over $1.5 billion in revenue to use Google Apps as a suite. “We save over $1.6 million a year using Google Apps,” says the Avago rep.

  Another recent Google App convert, Morgans Hotel Group, the proprietor of the Clift Hotel, at which this event is being held. The Clift rep says the platform has had a tremendous impact on the company already and it’s only just made the switch.

• So, why are companies adopting Google Apps? A few reasons: Radically lower costs, obviously. But also a steady stream of innovation. We haven’t exactly seen that from Google yet as I noted in the introduction, but presumably there will be some evidence of it on display later this morning.

  To be fair, Google did make a few additions to Apps last year–APIs and whatnot. Girouard offers Gmail offline and Secure Data Connector as examples of this. The company has made other smaller enhancements as well, such as extensibility features and enterprise Interoperability features.

• Interesting. Girouard says Google Apps often provides a 3X cost savings over other non-cloud solutions. He also says Google believes it has a more reliable product than most. The company is holding itself to that claim by being more transparent about downtime and service incidents. He notes the Apps Status Dashboard, which tracks up and downtime, as a move in this direction.
• “Failure is not an option,” says Girouard. His mandate to his team: There can be no failed deployments. Enterprise deployment and support must be streamlined and easy.
• All this is wonderful, but what’s the company got that is new today? Google Apps Sync for Microsoft Outlook for one thing. The App allows users to sync Outlook with Apps just like Outlook natively syncs with Exchange. Offers fast email sync with Google-native protocol, full calendar and contact sync, as well as global address autocomplete and search and free/busy information support.

  Google has essentially recreated the Outlook GUI within Apps. Seemless integration. Works offline. Same familiar Outlook experience. Use Gmail and outlook simultaneously. Everything is supported natively and, as the demoer notes, “your data is safe, it’s with Google.” Well, that’s one way to look at it.

  Google Apps Sync for Microsoft Outlook is available today as part of the company’s Premiere Apps. It’s available for Windows only and it is an enterprise-only service. It is, however, available for free to non-profits and educational institutions.

• A few quick case studies: Avago rep says this represents the “last hurdle” for users to get over migrating away form Exchange. The feedback we’ve gotten is that this looks “exactly the same” as Exchange. Genentech rep relates a similar experience. “It looks like a native Outlook experience. The average has no idea we switched out the back-end…We anticipate widepsread adoption.”
• Girouard: “I bet you never imagined you’d see Google demonstrating Outlook for you all, so this is a first.”
• Moving on now to the Q&A:
• Question: How much revenue flows through this?

  Girouard: Hundreds of millions of dollars…that’s as explicit as we’ll get.

• Q: How is the company dealing with Microsoft and its entrenchment in this particular sector?

  Long meandering answer that ends with this: The company has a new App Reseller program that it debuted in April. It will give it more feet on the street and expand the ecosystem. That’s a start, I suppose.

• Q: Is Outlook the only app that makes sense for this sort of sync, or is the company considering doing something similar with Excel and PowerPoint as well?

  Google’s clearly already put a lot of thought into this and expects to pursue it. That said, says Girouard: “We don’t view the world as you’ve got to get rid of Office and use Google Apps instead. We see it as more nuanced than that.”

• Q: Did the IT folks in the room have any concerns about Google’s commitment to these services?

  Apparently not. The Morgans Hotel rep says has has “no reservations about the future viability of the product.” Gmail’s been around for a while now, hasn’t it? Also, notes Avago guy: “Don’t be evil is one of Google’s core values…We’re taking them at their word.”

Interesting comment from Genentech rep amid remarks out mobile needs: “I can’t get Android phones fast enough for our folks.”

• Q: What areas are showstoppers for CIOs considering a migration to Google Apps? What services and apps do they absolutely need to retain control over?

  The Morgans Hotel rep says none. “We’re looking to move everything to the cloud.” The Avago and Genentech reps say pretty much the same thing. The Genentech rep: “Anything in the cloud is fine by us.”

• Q: What areas can developers play in without being crushed by Google?

  Giouard says there are many. “We’re going to have a very large installed base of Google Apps users and there’s a great opportunity here for developers to sell into that…We are really opening up the stack to the developer world and that’s going to be great for our business customers.”

• Q for Genentech rep: At what point will you shut down Outlook?

  “I don’t see us shutting it down any time in the near future, but we hope that the number of Outlook users shrinks as our employees see the benefits of the Web and Google Apps.”

• Asked for his feelings on companies that use the term “cloud computing” to peddle non-cloud computing services, Giouard replies: IT giants have co-opted the cloud computing term.

In design, the device seems to borrow quite a bit from T-Mobile’s Sidekick, and its touchscreen GUI owes a thing or two to Apple’s (AAPL) iPhone. Which makes perfect sense, since that’s the device it’s clearly intended to compete with. The G1 will run on both 3G and Wi-Fi and be tethered to the T-Mobile (DT) network. It will come preloaded with a version of Amazon’s MP3 store and Android Market, an application store similar to Apple’s App Store. And it will support and sync with the broad spectrum of Google (GOOG) apps–Google Talk, Google Calendar, etc. Its browser is something the dev team refers to as Chrome-Lite, a mobile version of Google’s new Webkit-based Chrome browser.

Oddly, the G1 has no built-in video player. Odder still, it has just 1GB of memory. T-Mobile has helpfully outfitted it with a 1GB/month bandwidth cap, though.

The G1 supports PDFs and Microsoft Office documents as well. Email will be handled through Gmail; there is no Exchange support, though presumably, engineers developing for Android Market will fill that void in short order.

Oh, the device offers copy-and-paste functionality. Hear that Apple?

It will arrive at market Oct. 22. Price: a highly-subsidized $179.

In written testimony to the House Committee on Oversight and Government Reform, Steven McDevitt, a former information technology specialist at the White House, explained that the administration began migrating its email to Exchange without having an adequate records-management solution in place. Worse, its email-retention process was as laughably primitive as it was insecure. To quote McDevitt:

The initial email-retention process involved a manual process of copying messages from the Exchange journals to .pst files for storage and retention.”

The White House refers to this process as “journaling,” which is most likely a euphemism for “interns handled our email backups.” And, in this case, without the proper access and logging controls to prevent tampering or even note that it had occurred.

All of this is quite troubling, to say the least. But not to worry–the White House is at this very moment developing a new archiving system. Too bad it’s unlikely to go live before the end of this administration.

Well, if this rumor proves true, Canada really will have to declare a national day of mourning for the BlackBerry (RIMM). When Apple (AAPL) CEO Steve Jobs uncrates the 3G iPhone a few months from now, presumably at the company’s WWDC conference in June, the device’s price may draw more oohs and ahs than its feature set.

Fortune claims AT&T (T) plans to knock $200 off the cost of a new iPhone for customers who sign two-year contracts. If that is indeed AT&T’s intention, the 8-gigabyte version of the device would likely price out at $199, the 16-gigabyte model at $399. Which is a pretty compelling value proposition given that the device will soon support Microsoft (MSFT) Exchange and run Spore, Salesforce (CRM), AIM from AOL (TWX) and a host of other third-party apps.

No wonder Apple execs seemed so comfortable reiterating the company’s goal of selling 10 million iPhones in 2008. At $199, they might be able to hit that number without the Asian markets.

We’re telling IT executives to not support it because Apple has no intentions of supporting (iPhone use in) the enterprise. This is basically a cellular iPod with some other capabilities and it’s important that it be recognized as such.”

–Gartner analyst Ken Dulaney, July 2, 2007

Today’s an important one for Apple (AAPL). The company is hosting a “town hall” meeting to discuss an iPhone software roadmap. Presumably, this event will see the release of more details about the eagerly anticipated iPhone SDK, but perhaps not the debut of the SDK itself. Certainly, that’s the impression given by the invitation to the event–”Please join us to learn about the iPhone software roadmap, including the iPhone SDK and some exciting new enterprise features.” Enterprise features? Ready to eat your words, Dulaney?

But whether the SDK is released to developers today or not, this event promises to be a watershed one. Because it heralds a vast new addressable software market for developers. After all, the iPhone and iPod touch run OS X, and presumably most future iPod models will as well. Which likely means that applications written for Mac in Xcode–Apple’s development toolset–will be deployable on any OS X device. They’ll be “write once, run anywhere”–anywhere there’s OS X, that is. And word on the street has it that we may see a few of them as early as today.

The event begins at 10 a.m. PT (1 p.m. ET). Updates to follow …

UPDATES:

• The event’s begun. You’ll find streaming video of the event here.
• The next iPhone software update will include support for Push Email, Push Calendar, Push Contacts, Global Address List, Cisco VPM, Certificates and WPA2/802.1x, Security Policies, Device Config, and Remote Wipe. Wow.
• Responding to customer demand for Microsoft Exchange on the iPhone, Apple has gone ahead and licensed ActiveSync for the device.
• Exchange will be native to the iPhone. Jobs must be muttering multiple “BOOMS” from backstage.
• Nike and Disney have been testing Exchange for iPhone and are pretty happy with it.
• Scott Forstall is now taking the stage to talk about the iPhone SDK. Apple giving developers the same tools and APIs it uses to develop iPhone apps.
• Apple took Cocoa and created Cocoa Touch, a new framework for building apps.
• The OS X kernel is the same for desktop and iPhone.
• Xcode has been expanded to support iPhone. It will code complete APIs for the iPhone SDK. (See? What’d I tell you: write once, run anywhere there’s OS X.)
• SDK includes Interface Builder and iPhone Simulator that allow developers to run their apps on their desktops. “It runs on a Mac and simulates the entire API stack on your computer,” Forstall says.
• Forstall builds a quick “Hello World” app, drops it on the iPhone and runs it. Quick and easy.
• “This is an app I just built in two minutes. But we wanted to see what we could build in two days. So we built Touch FX,” Forstall says. It’s an image editor that allows you to warp photos by pinching them.
• Forstall then demos Touch Fighter, a point-and-shoot game.
• Did I mention the SDK is available today? Good luck downloading it …
• Whoa. Travis Boatman from Electronic Arts takes the stage and demos an iPhone version of Spore. They’ve already ported 18 levels. (Hope SDK includes tool for building spare batteries.)
  

• Apple really pulling out all the stops on this one. Chuck Dietrich from Salesforce.com onstage now.
• Salesforce ported one of its automation tools to the iPhone, one that graphically displays how salespeople are performing against their goals.
• Next up: AOL. AIM for iPhone. Took five days to build.
• Larry Ellison takes the stage to announce Oracle Database 11g for iPhone.
• Kidding.
• Epocrates demo. Clinical reference app for doctors.
• Ethan Einhorn from Sega up next.
• Ha! Super MonkeyBall for iPhone. “This is not a cellphone game. This is a full console game. … We had to fly in a developer to upscale the art for the iPhone,” Einhorn says.
• Jobs back onstage. Announces the iTunes App Store. “You’re a developer who just spent two weeks or a bit longer writing an application. What’s your dream?” Jobs asks. “To get it in front of every iPhone user.”
• Apps can be downloaded wirelessly or sideloaded via iTunes. “This is the exclusive way to distribute iPhone applications,” Jobs says, adding: “We are controlling distribution.” (We will control the horizontal. We will control the vertical. You are about to participate in a great adventure. You are about to experience the awe and mystery which reaches from the inner mind to… The iTunes App Store.)
• Developers price their own apps and they get 70% of the revenues they generate. Apple takes 30% for running the App Store. ” … To be clear, we don’t intend to make money off the App Store. We’re basically giving all the money to the developers, and the 30% that pays for running the store, that’ll be great.”
• Apple plans to release an iPhone 2.0 software update in June that will include enterprise capabilities, App Store, etc.
• One more thing …
• Oh, look: It’s KPCB’s John Doerr. Must be here to demo i’MRich for iPhone.
• Doerr announces the iFund for iPhone developers.
• $100 million to start. Boom.BOOM. BOOM! “That should be enough to start about a dozen Amazons, or even four Googles! … If you want to invent the future, the iFund wants to help you build it,” Doerr says.
• END

(Spore photo courtesy Gizmodo)