>> live from pier 3 in san francisco, welcome to the early edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. emily chang. a major security flaw could affect two thirds of all internet servers and delete sensitive data vulnerable to hackers. we will tell you what you need -- asw. and will comcast gets grilled by senators on their deal with time warner

cable. but first top headlines. tech stocks are rising tonight. the selloff has caused some tech titans huge numbers to read when you added up, the top billion dollars have lost $11.5 billion in the selloff. jeff bezos, mark zuckerberg, bill gates -- they all lost more than $1 billion each in four days of trading. m.i.t. has put a professor back on the stand as it tries to win a patent infringement case against samsung. he provides evidence that he says shows consumers are less willing to buy samsung products without the features that infringe on apple patents. and website registration and dy hasg company go dad

lined up bankers for its ipo. it aims to go public in the fall. story of thelead day, editor-at-large cory johnson with us. were talking about this massive security bug, and open ssl, security that twon software thirds of websites use. >> whenever you see that lock, that means you are one of those supposedly secure sites -- >> that means they cannot see, read what you're doing. >> or maybe it doesn't. >> the bug has been around for two years. ,> it is an interesting story because it's not just the potential threat. we are hearing so much about really big attacks we have never seen before. this resonates deeply. the target issue looming large. >> all right, and the virus can take personal information,

passwords, credit card numbers. we are joined by our cyber security correspondent here at news.berg west -- pe fromining us on sky st. louis -- what happened here? exposed by was google researchers. what did they find and why did it take so long? googleas found by researchers and guys from another company. this is an enormous find. they found an important. the flip side is they coordinated a fix for it, as software patch. while the bug is tremendous, there is also a fix. most large website at this point have pushed out that fix. as you guys were discussing, this is a flaw in the anchorage and software. this is two thirds of the internet's websites.

it is open source software. it is community developed. that the bug has been around for two years raises interesting questions about who knew about it before. >> is this a victory for open source? because for many people were ?ooking for the problem or is this a failure of open source because people were using this essentially for free? >> i would not say either one of those. one of the things you need to technologies like these are out there all the time. it does not make you better or worse if it takes you to do years to find it. they are exploitables have not found fixes for. one of the nice things about crowd open source is you do have people looking at the source code to find this. however, like the previous

comments are said, you do not know who wall seeing this -- who last twothis in the years actually exploited this. >> let's talk about who is seeing this. jordan, you put together some good visuals of what the information looks like un -encrypted. if it is not obvious, you have to be skilled to interpret it, right? >> as soon as the bog exposure came out, some researchers were able to run test -- the bug exposure came out, some researchers were able to run test. is what it looks like? >> writes -- right. this is yahoo!. they have since fixed the bug. fromid, look, i can pull yahoo! e-mail. it looks like gibberish to the naked eye, but it contains

valuable details. >> these are some of the biggest tech companies -- google, amazon, facebook -- seem to have avoided this? it is a question we do not have the answer to. yahoo! was vulnerable until, i think, yesterday. google do not know is if and facebook were vulnerable before and fixed it. a lot of organizations like banks were never vulnerable because they do not use open ssl. wide range of company websites that were either vulnerable before and had been fixed, or never vulnerable in the first place. know the answer. >> what is amazing, the ability to see what is in any individual computer's ram -- >> memory. >> which would show you what that person had been doing. >> i would not say that inc. said not be in -- banks had not vpn, atm's,ble, but

all of these use ssl. the question is, was it a vulnerable version of ssl. to say the fix was out -- the fix was put out by the open ssl foundation. i was on a flight last night. on the servers, they were compiling it at 10 p.m. yes,swer your question, you are looking at arbitrary data in the working ram. this is where the temporary data is held. one of the things to understand. this is arbitrary. i cannot filter what information i'm getting. it is just handing the random information. it could be from any program running on that server. i cannot pick and choose. we do?an, what should

do we change our passwords? how do we know if our information was compromised? >> it is probably a wise practice to change her password. it is less about criminal hackers. it is more to protect yourself against intelligence services. >> so, the nsa? >> the likelihood that intelligence services did not know about it is pretty low. it is a good idea to change her password if you know the site has fixed the bug. if they have not, you may want to wait. you are still disclosing semi-publicly. always a good practice, change or passwords. >> all right, internet hygiene. just like going to the dentist. thank you both. all right, more on the use of massive data breaches later. we will be talking with the coo.tec ceo all --

and later how the comcast-time warner merger could affect you and the competition. we are streaming live. ♪

>> welcome back to "bloomberg west." i am emily chang. i'm with cory johnson. ok is on the hill. it sounds like this will be a tougher sell than maybe they prepared for. >> i think that is a safe that. after what we witnessed over the last three or so hours on capitol hill. senate judiciary members number republicans and democrat, grilling top time warner and comcast executives about the two topf the t top -- companies. the companies firing back saying, listen, this deal is good. faster broadband speeds for consumers.

more choices. at the end of the day, this is not anti-competitive. here is david cohen. >> objectively this is not a challenging transaction from an antitrust perspective. our companies serve distinct geographic areas. we do not compete for customers anywhere. it will not lead to reduction in consumer choice in any market. >> that line was challenged directly by other witnesses. you had public advocacy groups, consumer groups, as well as the network, alf channel wireless provider as well saying these sears size of the company would give this company undo leverage, on -- the sheer size of this company would give this company undo leverage, would give it unprecedented power. al in minnesota said he will oppose this deal. of minnesota said

he will oppose this deal. at the end of the day he said it is about consumers being hurt. >> comcast has the responsibility to let out for its investors. i am concerned the more big and dominant the company becomes, the less incentive they have to look out for consumers and the more power to squeeze them. >> al franken asked some of the toughest questions. we will be chatting with him in the 2:00 hour. ultimately it is not congress that will decide this. it is the sec and the justice department. >> what about the likelihood of approved? earlier on it seems like everybody thought this would go through despite opposition. what we sawiven today, the hurdle is higher. there is a likelihood of approval, but you will have even

tougher conditions given the politics around this, the criticism we are today, and the possessions the company is have -- the concessions the companies have offered may not be enough. and then the question if the conditions are so tough the companies decided it's just not worth it to move for work. >> does the sec listen to congress? do they realize the heat will be show? or is this just a >> they do listen to congress. congress controls the jurisdiction over the sec. -- the fcc. it is my understanding that they were in the room listening. there are politics. the fcc has to make a decision here, cory. know, all it takes as its way working into every single decision. what happens on capitol hill will affect the regulatory process.

>> i understand some of the big tech companies did, -- apple, set-top box,pple things happening before the merger was proposed. what can you tell us about that? comcast sell you the executive david cohen is the biggest acolyte or the tech industry. he is talking up their biggest competition are those tech companies. apple, google, they represent the real competition and that is is the competitive landscape different and more robust than the members of congress would consider. >> all right, peter cook, our chief washington correspondent. thanks for this. we will be following this story all day long. we will be joined by senator chuck grassley, the leading republican on the senate judiciary committee, here is concerns on the deal's impact on consumers later this hour. we will be right back. ♪

>> welcome back to "bloomberg west." i'm emily chang with cory johnson. we are talking about the comcast-time warner cable potential merger. the senate hearing just wrapped up on capitol hill. susan warner.by you were out with an op-ed on bloomberg view. comcastle of it " depends." to us.it is a gift >> this merger and has to go through. their job is to create an air of inevitability about this deal. the politics in washington are

drifting against comcast's plant. it is not at all clear that the concessions in the public interest are actually in the public interest. >> senator franken pointed out saving money, those savings will not be passed on to consumers. >> they have an obligation to prove to the fcc that this merger is affirmatively in the public interest. they are saying whatever we do, it is not going to add up and to lower consumer prices. it will be more efficient for them to drive down the prices of programming, but no particular consumer benefit. yes, they have got an obligation to show that public interest is served by this merger, and as far as i can tell, they are not making that

showing very strongly. the hearing shows that they will have a tougher sell than perhaps they thought they might. not get thisdo over? >> i think it is about even. the fcc takes the stairs lead. david cohen keep saying we do not compete in any geographical area. that is like the five families saying we have made peace. the top cable organizations long ago divided the nation among themselves. that gives them power over every other element of the media ecosystem. everything from devices -- particularly high-speed internet access. we will see a long series of pleadings and meetings going on at the fcc and the department of justice. >> susan, did you -- you just compared the cable industry to

the mafia. do you really think that they i'mthe gambia on ocr? >> just saying they never enter each other's footprint, and now as a plus forhat the merger, that competition will not be reduced. when they merged with nbc you, , -- with n withnbcu wouldhey said competition not be reduced. it is as though no possible merger with comcast could hurt the consumer. >> what about apple and google? cable access,ce the cable companies are absolutely dominant. for americans, for many the only choice of a internet connection

is their local cable monopoly. they are saying that they are afraid of google and others. the fact is they are friendly -- frenemies. comcast is the one with the wire into peoples homes. that is the connection that gives comcast enormous power. >> susan in your book you make the pretty good argument that the monopoly law does not understand how these systems work in the new era and the geographic comparison does not work. what is the right way to look at monopoly law? >> comcast has such enormous buying power with this merger. it is going to be buying all of the programming, setting prices for it. it is going to be buying all of the devices consumers have in their homes. lookedwer has not been at as stringently.

comcast will be shaping entire markets. everyone will have to do things their way at the merger goes through. i know the department of justice will be looking at this closely from that perspective. the fcc has an even broader edict, which is to look at the public interest part of the deal and again whether it is in the public interest. yes? >> quickly, susan, are there any precedents for this merger? are there any precedents? comcast-nbc universal. think back to the days of my bell -- ma bell. these companies have the same power that the old tnt had over telephony. they are being able to vertically cover these markets without any oversight or competition. we have a lot of work to do. the country should be an entirely different trajectory.

>> all right, a harvard visiting professor susan crawford, bloomberg interviewed her. thank you for sharing your views with us on "bloomberg west." the senatewill have judiciary's chuck grassley, ranking member there, his insight on today's testimony. you can watch us streaming on your phone, your tablet, and bloomberg.com. ♪ >> it is 26 minutes after the hour. that means bloomberg tv is on the markets. i am julie hyman. let's look at where stocks are trading today. we do have some gains here. i'll tell as better than estimated earnings. we are looking for the fed minutes in a little more than a half-hour. in terms of individual stocks, take a look at alcoa, just mentioned. earningofficially a top season. remember, it is not on the doubting the -- it is not on the dow anymore.

addicting they will exceed production this year for the first time in nearly a -- predicting they will exceed production this year for the first time in nearly a decade. more on the markets in a half-hour. and you will get "bloomberg west ." ♪

>> you are watching "bloomberg in a" where we cover vision technology. i'm emily chang with cory johnson. comcast executives testifying before the senate judiciary committee, defending their case to take over time warner cable. is the chuck grassley ranking member of the judiciary committee. he joins us from washington. senator, thank you for joining us. you were inside the hearing today. where do you fall in this debate? purpose is process,

and not make a decision of whether or not this is a or not.te merger the federal communications commission and the department of justice is going to make that area -- make that. hopefully those are not political decisions. those are decisions based on the economics and the antitrust laws. this committee meeting and the hearing serves a very important purpose, and that is to get all interest onholders' the table, particularly the consumers of america, because this merger is going to eventually serve 30 million people, compared to 24 million people now, that one of those companies as. get everything out on the table. make sure all of the interest aretaken into -- interests taken into consideration. federalhe

communications commission knows that congress is watching and expects the laws to be followed the way congress has passed them. >> the way the monopoly has been geographically, not with the consequence that goes across the geography -- this may be different because we are in a new modern age that does not go across geographic borders. the questionse of i had off comcast. cohen, who was there. i asked him specifically that question when it comes to content, and is it going to p -- even though comcast is not an iowa, it could have an impact on iowa, because when comcast makes a certain less sparsely populated parts of the country,

it could have an effect depending on what that cost and whether -- whether he drives down the price. he took theexample, position it would not raise rates for anybody else, but we also had a consumer representative there. -- well, other interests were represented, but the consumer interest took exception to what he said. >> so, senator, at this point, what are the pros of a possible deal? what is in it for consumers? >> in a highly competitive environment we are in with all sorts of new technology, tomorrow is going to be different than it is today. you know, if we were talking about this 10 years ago, this sort of merger, you would not even be talking about it. but things move so fast that we have to consider the impact of

that change. to what we are talking about today, tomorrow may not be as significant. we have all this new technology, all this way of getting information around, particularly the internet and everything you can get over the internet, that the competition today is different than it was. so, mergers like this may be legitimate today, where maybe 10 years ago they would not have been legitimate. >> senator, obviously you are going to be the one looking into the future here. if you determined this will keep prices flats or potentially raise prices, would you vote against the deal? now, you just asked something congress is not going to do. congress is not going to vote on this merger. to be decided by the department of justice and the federal communications commission.

if i came to the conclusion that you just asked me about, what i did -- what i would do is i would write to those two government agencies and i would tell them i have this fear and i expect them to take that into consideration. the more senators and congressmen you have making those communications, i would not say it would be a determinant fact in the case of the state of agencies, but by golly, they better take it into consideration that is our year. yearnderstand and the 225 220 five-year history of our country, congress has not -- except in the case of the oil companies, congress has not gotten involved in splitting up. the green decision. they split up something. standard oil was split up. but normally, that is why the sherman antitrust act was passed, to have a general view of what is antitrust and what

isn't antitrust, and then the justice department makes that determination. it ought to be an economic determination based on protection of the consumer, because that is the purpose of antitrust laws, and not a political decision you might expect congress to make. >> senator, at this point given what we have discussed and what you have heard, given all the issues, which way are you leaning? >> well, if i told you i was leaning, that is like -- i was trying to influence this. what i do, let me tell you what i do every time. agricultural or businesses merging or banks or tolines -- i write a letter the department of justice, expecting them to take everything into consideration and to make sure the antitrust laws are carried out according to the intent of congress and decisions that interpret that

law. that is where i go. >> all right. senator chuck grassley, thank you for joining us. we will follow the story. we appreciate you sharing your position with us here on "bloomberg west." coming up, how is the affordable care act changing the netscape for digital startups? we will talk to one in investor about the future of biotech and digital health and whether we are entering a bio health bubble. ♪

>> welcome back to "bloomberg west." i am emily chang. the affordable care act has created unprecedented incentives for investors to jump into digital help. funding for new companies has last year, since $700 million in the last quarter alone. dr. beth seidenberg has been -- life life sir it

sciences company for a decade. she has been a ceo two times over. she joins us in the studio right now. thank you so much for joining us on "bloomberg west." it is such an interesting career to ceo. dr. to investor how does that happen? >> it happens by keeping your eyes open and taking whatever opportunity is in front of year. the hiv crisis and trying to make a difference for people suffering from aids. i did the first clinical trials, was part of that for kpcb. i developed a passion to make a difference for patients and to do it on a larger scale. in practice, i took care of patients for about seven years. then i went into rugged development at merck and amgen -- product development at merck and amgen. then i decided i wanted to build

companies and make a bigger impact. >> why do we see this money flooding biotech right now? biotech is seeing a tremendous renaissance. it is a combination of science and insights and technology we never had before. the tools of genomics, retooling how patients respond to therapies, we are able to make drugs that have a higher probability of success and we are curing diseases we never had an opportunity to do. >> i know you have seen tremendous progress in cancer treatment. how close are they to a cure? i know that is the question always asked. it is so important. >> it is tremendously important. it is one of the largest killers of men and women in this country and worldwide. it is a passion of mine. i have worked with tremendous entrepreneurs working on breakthrough therapies for

cancer. we are making progress. there are patients being cured or having long-term responses. we are doing it a cancer at a time. what is exciting now, we are starting to see the cancer is telling us what therapy to use. it used to be you were diagnosed for breast cancer and there was one treatment option. now you are diagnosed with breast cancer with a brca-i or brca-ii mutations and we are able to target therapies. one company is the leader in this field -- it never fails to surprise me how far behind our doctors are in terms of e-mail, in terms of electronic records. it is shocking. >> it is shocking. as a physician who trained in an era without computers and walking around with a white coats with big books and

shoulders drooping all the time, i am thrilled we are seeing technology finally in health care. this is one of the industries that has not been disrupted by technology, and it is happening now. it started -- it is very interesting to look at what is happening in our eldercare system. what's lit the fuse was the high-tech act. a benefit of the economy rolling in 2008 was the stimulus package. $27 billion was put aside to build the pipes, to build the electronic medical records to allow incentives for physicians to start putting their records on computers. now we are seeing a generation of patients and people like you and me who live our lives on our iphones and our blackberries -- sensibly used blackberrys. our ipads. understand why we can't

get all that information on our computer. >> how much is the affordable care act impacting you and impacting this space? >> it has a huge impact. it is a combination of the high-tech act and the affordable care act. those two things are allowing for what i would call a titanic change in the u.s. health care system. what is happening with both is we are providing -- we are providing people with the tools theireed to actually have records or have the information they need to manage their health. biotechly, about this bubble, the nasdaq index has dropped 15% in the last two months. valuations have been quite high. there have been a lot of ipo's.acked ipo for a -- what is happening? >> there is a tremendous interest in biotech.

companies are developing products that are getting to market and have huge revenue. the biotech index over the past few years has outperformed the s&p 500 and the nasdaq index. people realize money can be made in that space. selectivity in what companies are being valued high and what companies are being valued low. i do not consider it a bubble. i consider discriminating investors are excited about the space. >> all right, dr. beth seidenberg. thank you for sharing your work with us on "bloomberg west." we don't get to talk about biotech often here, but it's incredibly important. >> thank you very much. >> symantec says we have entered high-tech data breaches. we speak with the coo, next. ♪

>> welcome back to "bloomberg west."

i'm emily chang. 2013 was the year of the mega breaches according to symantec. just before the news broke about the flaw, we sat down with symantec's chief operating --stephentreet smart gillett. >> there is what we call the mega breaches. had one.we in 2013, we had over eight. you see that trend exploding on -- landscape.area >> it is like organized crime. going from criminals to organized crime. nationstate actors. there are even individuals. you look at the kind of game they want. some are in it for notoriety, monetary gain, intellectual

property. they are targeting personal assistants and pr professionals as a way to get access to dozens of executives who have that data. >> obviously target is one of your lions. they were using your software and it detected a breach, but target missed it. -- obviously target is one of your clients. >> i want to talk about any specific company, but one thing you can do is make sure you have a layered approach to your security. gateway, howwork, you train your employees into your security profile. that is something we uniquely do for target and others. >> yes, but there was a report that target should have caught it earlier. given the amount they are spending on cyber security, if they cannot detect a breach that big, what does it say about the cyber security industry today? >> you have to look at the approach companies need to take. rather then point at one activity to protect you from the

bad guys, we take a layered approach. permissions are being used. are you training your employees adequately? are you protecting your enterprise across your users and information? >> what has changed to make this happen now? >> right now you see bad guys who are much more patient and persistent in getting information. patient than they were? that does not sound like a technological change. they had 20%at less means to do targeted attacks. they are more sophisticated. they are more patient. they are going for the big payday, the big payload of information. >> interesting. some people talk about a siebel security bullet. so many services claim to be the silver bullet. he talked about a cyber security silver bullet. do? is a ceo to >> look at the threat.

make the visibility of that a core issue of your company. it cannot be regulated to i.t. or a certain part of the business. it has to be critical to what you do everyday. >> in terms of the breach, what are the commonalities? besides the size and scope of on attack? >> it depends what they're going after. if they are going after my mother, and i.t. or corporate asset, they use different tactics varied on the consumer side, they use engineering and patience to get to information -- or log in, your credentials. they could be going after intellectual properties, ran somewhere, in crypt in your files and forcing you to pay a re, encrypt inomwa your files and forcing you to pay a ransom to get out of it. symantec, your ceo was

recently fired. can you tell us what happened there? >> the board is very active looking for the right candidate to lead the company through its final years of transformation as we go from fiscal year 14 into 15. in terms of why our ceo was let go, we have no new information. have changed the way salespeople are compensated. you change the product outlook. outlook's the product product outlook. things have come and gone. how do you manage during this type of -- this kind of time? >> part of our transformation, like you said, we structured the sales force, created new products, new offering, redistributed our channel for our team partners. it is a lot of heavy lifting for the company to lead in the future. there's a lot of diversity buried a lot of change. you have to stay pertinent. and you have to have leadership

where you do business. you have to be able to balance that. >> what about mobile? >> mobile is a new dispersed authority for where information is being consumed. you hear about trends like, bring your own devices to work. you bring it in, hey, can you get this working for corporate information, for my e-mail? we do a lot of that byod concept. through a sealed program that apps, whetherin you have mobile distribution and mobile consumption by your employees -- all of this bring services and solutions that symantec can uniquely bring to market. coohat was symantec's stephen gillett. now it is time for the b-west byte. normally it is brought by jon erlichman. te for today.by

what have you got? line -- comcast expects roughly $4 million in capital cast -- capital cost efficiencies. the high tech companies that supply gear. >> who are those companies? >> they are all over the place. from cisco to set-top makers like google, apple, xbox -- who knows? what does this mean for netflix question mark >> i think netflix is trying to get that are positioning at the home. they are trying to develop a better experience. the cable guys want to get together because it will save them money. does the experience changed for the consumer? it could be an advantage for netflix. we will see. >> all right, we will be covering this throughout the day. one thing you know from

comcast -- that is not savings thing passed on to consumers. >> thanks for watching. ♪

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>> from bloomberg world headquarters in new york, i'm mark crumpton. ."is is "bottom line today, the fed releases minutes from its first meeting under janet yellen. then, fixing detroit's finances. and an exclusive interview with minnesota senator al franken. ♪ to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories