IPhones have actually had MMS support built in since June when the iPhone OS v3.0 was released.  AT&T, however, kept the functionality disabled for fear it would overload and break its network.  Meanwhile, AT&T upgraded much of its network and built extra capacity to handle the service. 

On September 22, early last week, it sent a free SMS text message to inform its customers that it would be rolling out the update on Friday.  The message read, "AT&T Free Msg: Picture & video messaging (MMS) will be available for iPhone on 9/25.  While we prepare your account for MMS capability, the current 'view my message' experience will be turned off but your ability to send and receive text messages will not be affected."

Users began receiving the update when they synced their phones with iTunes on Friday.  The update wasn't without its problems -- most of which appear to be software/firmware related.  Some users found that their attempts to send MMS failed.  Apple and AT&T suggested users first try to reset their networks settings.  A more extreme fix involves selecting your iPhone's settings in iTunes and choosing "General > Reset All Settings > enter your pin if prompted".  That fix appears to get MMS working, but you may have to reenter your Passcode, Wi-Fi passwords.  You may also lose your VPN connections and remembered Wi-Fi networks.  A perk, though, is that your apps are arranged alphabetically, something previously not easily done.

While the MMS was the big news for iPhone users this week, a battle between AT&T and Google somewhat stole the show away from it.  Following the rejection of the Google Voice app several weeks ago, which allowed cheap long distance calling and free SMS messaging, Apple initially took the blame for the rejection when the Federal Communications Commission launched an inquiry.  Apple said it was still working with Google, but disliked that the app changed and replaced parts of its interface, which might confuse its customers.
 
Now AT&T has issued a second response to the FCC, attacking Google and taking a very different bent than Apple's conciliatory tone.  AT&T claims that Google Voice violates common carrier laws, by blocking customers' access to numbers on carriers that charge higher interconnect fees (such as some rural carriers).  The practice is prohibited for traditional telephone carriers, but its unclear whether Google Voice would have to abide by the ban as well -- though AT&T is adamant that it must.

AT&T's scathingly attacked Google in the letter, saying the company's "noisome" calls for net neutrality were a bunch of hot air.  It said Google's blocking represents an "intellectual contradiction" as it argues that the company is discriminating against access to certain data.

Google quickly fired back with a blog defending this practice.  It says as the service is free, web-based, invite only, and not designed as a replacement to traditional services, it does not believe it is subject to these laws.

It goes on to attack rural carriers, quoting AT&T and other telecoms as saying they "establish grossly excessive access charges under false pretenses," and "offer kickbacks to operators of pornographic chat lines and other calling services," while linking to supporting sources.

Google concludes its argument, stating, "AT&T is trying to make this about Google's support for an open Internet, but the comparison just doesn't fly. The FCC's open Internet principles apply only to the behavior of broadband carriers -- not the creators of Web-based software applications. 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."