>> live from pier three in san this is "bloomberg west." let's check your top headlines -- u.s. troops returning from ebola stricken parts of west africa will be quarantined for 21 days. the order was signed today by defense secretary chuck hagel and that expands a similar isolation policy already in effect for the army. cdcuns counter to the policy which advises against a blanket quarantine. america chairman and ceo brian moynihan says the company's mortgage headaches are behind them. --says keeping a close i

he's keeping a close eye on the u.s. economy. >> to think about financial markets, they reflect the economy. what we see this month when you see the statistics is it is as strong as it was last month, maybe even stronger it. . you hope that comes through in america continues to make progress because of you look around the world, other places are. not as growing up as fast 125,000ank signed up apple pay customers in the first day it was available. one of apple pays competitors have already been hacked and has not officially launched yet. notifieday current c customers but some e-mail addresses were compromised. cvs and rite aid recently blocked apple pay. ibm and twitter have announced a new take analytics partnership.

ibm software including its watson unit will be able to mind twitter posts to see what.credit -- clients are saying about an issue this comes as both companies see to boost growth. how big a setback is the explosion of the and terrace rocket to the private space race? this was the scene off the virginia coast line as the unmanned rocket blew up on launch yesterday. liftoff of an terrace debt of on taras -- of antarus. the main engine is at 108%. . >> the orbital science spacecraft was headed to the

international space station on a resupply mission. nasa says the astronauts in space or in no danger of running out of supplies. the investigation is underway to see what caused the $200 million rocket and spacecraft to blow up. with me in the studio is cory johnson and former astronaut leroy ciao. also on skype, colonel hatfield. how big a setback is this for nasa and/or troublesome is and how big a surprise is something like this happening? >> it is a setback, no question about it. this is not something that will jeopardize the program. launching rockets even though we have been sending us not to over 50 years come you still got some complex pieces of machinery and any time you had to put that much energy into a vehicle, there will be risks and there

will be some mishaps like you saw yesterday. fullare going to do a investigation of course to find the root cause and learn lessons from that. that will lead to more robust rockets in the future. as you heard, there was no injuries on the ground. the crew on board is in good shape and they got enough margin on their supplies. the biggest impact is to orbital. this has impacted their company quite a bit but they will bounce back and have been doing this for a while, several decades. it's not a total surprise because in this industry, it is still not routine. >> both of you were asked about sign of investigation is underway and is very early hours -- any early ideas about what may have happened? leroy and i have both written

a couple of debt written on a couple of different rockets. culbertsono frank who was the person from orbital talk about last night and watching the video, you could see that the big first stage they lifted and t off the pad but a few seconds later, something significant failed. you can see the color of the flame coming out of the back changed as if the mixture between oxygen and fuel suddenly changed. then there was this lien instantaneous loss of power. the vehicle started to fall. closely, it looked like something might have come out the side of the base of the rocket which might indicate that the engine itself was coming apart. it's too soon to be conclusive about that. stressed, the spaceship is ok and six people in orbit right now are ok and no one was hurt on the ground and it may -- it mayraight

demonstrate that it's an international space station. we are not just counting on one company. lossesas a russian morning and there will be a american launch in december. it's good to have a big partnership when you doing something as complicated and dangerous is flying in space. to the international point, my understanding is that the engines it used by orbital science were literally made by russians in the 1960's. it's something that elon musk pointed out and it sounds like the punchline to a joke. these engines were literally made by the russians in the 1960's. science bought them -- is this the wrong technology to be using? correct, the original engines were made by the russians and the ukrainians many years ago. they were brought over and refurbished and were supplied to

orbital and other companies. launch vehicles used russian kerosene engines as well because that was the deal that was made with congress way back when we started working with the russians back in the mid-1990's in the united states was concerned about russian engineers and scientists in the space industry. there are concerned about science is going to work for countries we did not want them to work for so we engage those engineers and one big ways was to buy kerosene engines because we were facing those out of production and doing more advanced cryogenic engines. reasons, younical want to use kerosene as a first stage engine because it didn't -- it generates a lot of thrust. you cannot single out orbital for using russian engines. only modernthe built kerosene engines in the united states are being done by spacex.

is it right to do that? i think it makes sense. the russians have experience building kerosene edges. -- engines. you could bring up the issue about the possible impact of the age of these engines and some other engines used by manufacturers which are built new. the age is not an issue but these engines were refurbished. i don't know, the investigation will tell. >> let me talk more about spacex and elon musk. what does this mean for the private space community? the real question is whether it is a commercial space flight or private has to do with the customer. the u.s. government was the main customer. it's not really private spaceflight, it's commercial just like all spaceflights. they are paid for by the

government. the only one on your list that's really trying to do something private is richard branson. he is trying to change the customer from being the government to the customer eating an individual. thingll has not flown one -- one passenger yet it is getting whether he has the right share of the market or not or whether he's got a viable business model means to be seen but he's the only one brave enough to truly bank is business on private spaceflight. the other ones including elon musk are working to use government contract to fund the research to come up with technology that might someday lead to private spaceflight. it's an interesting time in history and we will learn a lot from the accident yesterday. >> we will follow the investigation as it plays out. chao,hatfield and leroy thanks to both of you, former astronauts for joining us.

washington, d.c. pastor wright sharing law that says uber could service a model for the rest of the country we will speak with the huber policy chief next. ♪

>> i am emily chang and this is "bloomberg west." the washington dc council passed a bill that uber helps will help pave the way for other cities to formally legalize ridesharing apps. it's called a vehicle for hire innovation act of 2014 and has been heavily opposed by the taxi unions. they say it does not create a level playing field. --m joined by david plotz plouffe. it has been a few weeks of you on the job at uber, how is it going? >> it's an exciting and global

company growing by leaps and bounds. it's a great group of people who are just brilliant. we try to improve cities and make the company grow so i love it. >> a lot of regulatory challenges are ahead of you which you are skilled at potentially working out. tell me about what happened in d.c. and why this is such a watershed moment. thet really is -- it is 13th state in the last few colorado,lifornia, oklahoma city, nashville -- so there is momentum. it uber could call i mentum. we partnered with the local councilwoman so it's a creative standard. i think a lot of the debate is how you fit uber and the other ridesharing companies into existing regulatory change -- framework setters 60 years old. they looked at those new to create a new standard.

it is $1 million of insurance, seven year state background check for drivers, inspection requirements -- this is a model so i think we will build the momentum we have seen. many states and cities around the world are looking for a pathway forward because they see the value that uber is bringing in terms of helping their cities with transportation needs and hasslefree transportation and cutting down on dui. there are huge safety element so you will see washington do something a lot of other cities look to --.the young progress has already been made >> what about new york? only one but how are you mapping out your strategy in places like new york and around the world. >> things are going great in new york. we are close with a taxi and limousine commission there to provide a pathway for uber. it's one of our fastest growing cities. you look at a city like london which is a great example. it is a great taxicab tradition.

it's a place that generally is thought to have a good transportation service. we came in there and i've added to that so people have to realize is this is not either/or. it grows the transfer -- transportation pipeline. it grows jobs and increases the amount of people using ridesharing services and helps with underserved neighborhoods. one out of three of our trips go to a small business on cities where there is a public transportation grid, like metro rail, a lot of businesses not on that system suffer. uber expands the ability for people to travel in different parts of the city. you see a lot of welcoming and paris is one of our fastest growing cities. we are in over 220 cities in 45 countries. we just entered las vegas on there's a huge pent-up demand for people pushing a button to get a ride. we all live our lives in a way we want information right away. we want to make a reservation for an airline right away. this should be no different. that transparency and accessibility is taking off. >> i am a huge uber customer and

i could not live without it. many drivers are happy but we are also seeing uber drivers protesting in different parts of the country and some of them say they are not making very much money especially with the launch of uberx and free rides that have been offered in philadelphia. how are you keeping drivers happy and have the responses some of these people who say they are not making a living wage? >> you've got to look at the vast majority of drivers who are happy. we are adding thousands of drivers every week. you've got people who are driving full-time, who are making a good living and you've got a lot of people deciding to drive 10-15 hours per week. they like the flexibility. anybody money on a medallion or a car payment. it's your own car in your unscheduled so if you decide to drive for -- it is your own car

on your unscheduled. to whatibility is key you are seeing is more and more people use uber, the number of trips per hour -- these are small business people. they are entrepreneurs and many of them are sole proprietors and some of them have a fleet of cars. it's working well for the cities and the drivers. i think it is something that will only grow as more and more people get exposed. there are many people in san francisco who don't know about but even in some other cities there is people learning about the business. >> who comes first at uber? customers are drivers? >> the drivers are our customers rate does not work without great skill drivers were passionate about what they're doing. they are the bedrock of the company. we obviously have writers and one of the great things about uber is the riders and drivers have a relationship. they talk all the time about their lives in cities. it's a strong relationship and one we want to foster and grow. >> thanks so much for joining us

today. is $19 billion, $22 billion of what facebook is planning to spend on the long-term. what could the next facebook target be? we will discuss that coming up. ♪

welcome back to "bloomberg west." facebook shares are tumbling as the company says spending will increase 50-70% next year and user growth is also slowing. its user base grew to 1.5 billion in the third quarter. it is down from the three

percent growth it had in the prior quarter. cory johnson is with me now. it's no surprise that facebook is always focused on user growth before it is focused on monetization. you barely see any ads on instagram. >> they might focus on users but they are not getting the way they used to. there just are not that many users out there who are not on facebook except in places where they cannot be like china or in africa. whatsapp.alk about i spoke with sheryl sandberg yesterday and she emphasized that they are not planning on whatsapp and mark zuckerberg said we want to get to one billion users. yesterdayreaking out p financialat'sap[

filings came out. we can see just how about a business model it is. that got a lot of users and will find a way to monetize it but this business was losing so much money. they lost over $200 million last year and over $300 million in the first half of this year. sapp was not just expensive but expensive because of how much it lost and continuing to lose. >> what about oculus? what did mark zuckerberg say about oculus? he said don't expect anything anytime soon. >> he said just wait and see. this business is so good at facebook that they are able to run it with taking a lot of risks and spending money on projects that might not work out. that is the thing that has investors concerns. spending by r&d

facebook which is amazing. it's one thing to buy oculus which is small compared to buying whatsapp but the r&d spending just last quarter was huge. spendingyond the r&d desk it's a percentage of revenue. as the business gets bigger, the revenue.ing is 19% of that is almost as big as it's ever been. facebook gave us a clue before -- the last quarter quarter before they became a public company. >> cory johnson, thank you. we will continue to follow facebook. google and amazon are making these big sort of moon shots so it will be interesting to see how they play out. germany's rocket internet is bringing a copycat to the united states -- up next, we hear from

one of the companies startups launching in chicago today. ♪ >> "on the markets blumberg television is." let's get you caught up -- half an hour to go before we get the fed decision at the top of the hour. all in therks are red waiting that decision. couple of individual movers are orbital science is. shares are currently halted after falling the most since 2006 after an explosion destroyed its rocket seconds after liftoff. garmin, theares of gps maker reported earnings for the debt before the open and the stock is suffering its biggest loss and february, at 213. this is despite topping estimates on the top and bottom line. we will be right back. ♪

bloomberg west," i am emily chang. rocketstartup factory internet is bringing another tech copycat to the united states. space ways is launching in chicago today. the company allows users to order a storage box to their home and unpacked the box, and have it picked up and delivered to a storage facility. it launched in london with the help from rocket internet brothers this july so why is the company turning its focus to the u.s. market? the managing director is with us. from chicago. explain what you do.

as i understand it, it's like dropbox that for physical storage. >> yes, indeed -- it's an on-demand storage company which means that people go online on our website and tell us how many items they want to store and how might ox as like bookso store and documents and clothing and then we deliver the boxes for free to their doorstep and they pack the boxes would pick them up for free and people just pay a monthly storage fee. whenever they want the items back, they get them returned within. 24 hours >> what was the inspiration here? there are a number of other u.s. start of the do something similar like make space, city stash -- i know all about the physical storage startup market. now that i have done some research. 3 there is some competition out there. >> there is plenty of companies around doing this not only in the u.s.

the reason why we are pursuing this business here is we are well-equipped to build the best company out there. seems like a straightforward business model with a warehouse and drivers to pick up items and boxes and that's it. if you look at it more closely, never losingbout an item that people store with you. -- with back of rocking the backing of rocket internet, we thought we had the processes in place to make this business work and build a great company and that's why we decided to recited -- and we decided to expand in the u.s. it's an amazing market in that regard. a $24 billion market and has not changed over the last couple of years. time to bringwas this to the market. at rocketnt some time before launching this in this

company has had remarkable success around the world. it is also been criticized for simply copying other people's ideas in the united states. how do you respond to that? >> i can't speak for space ways. if you look at the business model, it is not new. the first company we saw doing something like that was started five years ago. there were not very successful and lost in chicago. there is a bunch of other companies doing the same thing. without the time was right to pursue this model and launch space way. first step of building a great company is having the idea which was out there already. it bunch of companies were pursuing this. it was more like movement and we felt we were well-equipped to make a really strong company that could do extremely well globally. >> there are a couple of

startups launching or that have launched in the united states. are we going to see more rocket companies coming here? that i amto admit really focused on space ways right now. i cannot tell you about other companies coming to the u.s. or other companies expansion plans. it is a decision made for each company. you start the company and then you think about where this makes the most sense. case, there is increasing demand for storage space. sawent to paris because we the same thing and ultimately, chicago. we felt consumers are looking for this kind of business model. >> what makes you think you can do it better than the competition out there? >> i think it's about operations. it's not an easy business model

and is not really straightforward. you have to do extremely well with your operations. you can't ever lose a box. off within ahe box pair of shoes, gets lost on the way and you'd get another pair of shoes. in our case, if a storage box gets lost, we might lose somebody's photo album or documents. that can't ever happen. that means you have to be extremely strong in setting up proper operations and knowing what you are doing. we have the rocket experience in warehousing and management system and transportation. we were well-equipped to make this model happen and to provide a better service at a higher service level than other players out there. >> the managing director of space way, thank you so much. -- twitterps to ipos

and boxer to tech companies to take it vantage of the jobs act. it has been more than a year since the law which gives startups five to go public more time to comply with government regulations went into effect. has it increased the ipo pipeline? cory johnson is back with more. mack gave a report to congress that was instrumental in passing the jobs act and joins us from san francisco for a victory lap? >> i guess so. >> what has the effect of this been? it's been out there now for a full year. >> i think it has been a big success, i really do. >> as measured by? >> the number of ipos that have come out since the jobs act, the number of smaller deals which is really what we were trying to get done, to get more smaller companies access the ipo market. performance of those ipos, the length of the ipo window being open on a number of different metrics has been an unqualified success.

length of the ipo window -- the market has been straight up into the right for four or five years. is the ipo window -- >> we have seen the ipo window close during more robust markets. the volatility index has been extremely low. on till a month ago, for two years, it was 12 or 13 and spiked above 20 for the first time in two years about a month ago. have just seen better pricing dynamics and i think that is helped by confidential filings which are part of the jobs act and test the waters marketing which allows companies to talk to investors before they go out on their formal roadshow and get a sense of what their value is and get a sense of whether they are ready to go out. we do not see as many deals withdrawn. we see better pricing dynamics. ipo's 67% oft egc

those price within or above the range since the jobs act. >> are the companies going public any better? >> i think the quality has been pretty good. we have not seen a rush to the market of substandard companies. you have not seen a lot of deals that crater. 2013 was great performers. >> that's where you see the numbers is in the smaller companies. trend of thet smaller companies getting funding and are seeing an increase. to $500 raising up million. the smaller companies are seeing more deals. >> i looked at those numbers and over the last year, we did 130 ipos in the u.s. market year to

date $100 million and below. in 2012 when the jobs act passed, we did 61 ipos in that size category. what concerns me is the shorter. of time for investors to look at the deal before they go out and that could lead to companies that are not doing the things they say they will do. there's a company that went out and raised money in part to build a big factor in detroit and said the factories up and running in september. i went to detroit and walked in the factory and it was totally empty. wouldworried that there be a lot of companies like this who were not ready for prime time as part of the jobs act. have we seen that? >> we really don't. the is borne out in performance over all of ideas. you'll always have a couple of deals that don't do well or have issues but overall, performance has been good and i would argue that you have to publicly file three weeks before you actually

start your roadshow now. you've got two weeks on the road and five weeks of your information being out there and being scrutinized. i really don't think that is a disadvantage to investors. >> if they look, they're going to look. thank you very much. the federal trade commission has accused at&t of deceiving millions of smart phone customers. we will tell you why and what it means for wireless carriers when "bloomberg west" returns. ♪

>> welcome back to "bloomberg west." been sued by the federal trade commission over allegations of data throttling which darted in 2011. to see that at&t lisa 3.5 million smartphone customers who had unlimited data plans by drastically reducing

their transmission speeds and then failing to notify them about going over their data limits. is this a common practice and how big a problem is it? joining me is cory johnson and from washington, chris lewis. public knowledge is a think tank for emerging technology issues. first of all, what is data throttling and what is the ftc accusing at&t of? >> data throttling is when a wireless carrier or any broadband carrier for that matter decides to slow down the transmission of the internet to its consumers. sometimes this is necessary for network management practices but we are concerned about the transparency of this practice. it's an upsetting thing that these people would be paying for this service from at&t which is one of the biggest companies in the world and one of the biggest

provider of wireless services. they're offering the service and not giving it to them and not telling them they were getting ripped off. >> that's right, the key part of the ftc lawsuit is that at&t and other carriers offer" unlimited" data plans. the reason the ftc is suing because they say that at&t has not lived up to its billing, that this was a truly unlimited plan. there have been complaints from consumers that at&t has throttled or slow down its data when thes much as 90% have to do with congestion. that simply does not measure up to the idea of an unlimited plan. when a company makes a promise of something unlimited, the ftc will hold them responsible to that promise. >> is like going to an all-you-can-eat buffet and all they offer you is salt. why would they do this? i don't represent at&t and

i'm sure they will talk about the importance of meeting to manage the network. there are certainly peak times when networks may get congested but it's important that the way in which companies choose to manage their networks is communicated to consumers. the federal communications commission has a rule, a transparency rule, that is still in place. complainedtion has otherust about at&t and carriers but whether they are being transparent about their unlimited data plans. this is not the only case and it's important that federal regulators continue to keep a close watch over these companies and whether they are truly providing what they offer. >> if it was me, i would be infuriated. >> are you and at&t user? >> now. >> i am.

chris lewis, thanks much for joining us. line" is coming up in a few minutes and mark crumpton has a preview. >> it's all about the federal reserve this afternoon. the open market committee concludes its two-day meeting. the focus will be on the end of the fed's monthly bond buying program. what did quantitative easing achieve and will the fed out china's focus on inflation? i will be joined by constance hunter and kathleen gaffney. special coverage of the fed begins at the top of the hour and i will see you then or it at big night for you in san francisco with the giants fans, good luck. >> i knew you're going to mention that. we will know if they won if you are smiling tomorrow. >> thanks so much. . we will see you in just a few minutes and we will be back with more "bloomberg west." you can watch us on bloomberg

television, streaming on your phone, your tablet, and bloomberg.com. also apple tv and amazon fire. ♪

>> i am emily chang and this is "bloomberg west." and hp announcement is that their companies has put pressure on other silicon valley companies but could going private be a better option? cory johnson is back with more. companies, the changes they have to make in the public markets are not available to them and they cannot make them quickly enough and have to disappoint shareholders. i set down to see what is going on with bmc who took themselves private. him how the business is

different than what we saw last time it was public? about they you talk new digital economy and all the unbelievable changes happening at the edge. end, you've got 10x increase in scale and size and those two things happening together in every industry makes them reinvent themselves and that's what we're focused on is helping them do that. >> biggest winners a big hardware are doing this. in spite of spending williams on acquisitions, they are seeing flat sales. -- in spite of spending williams on acquisitions, they are seeing flat sales -- instead of billions on acquisitions, they are seeing flat sales. >> if you can find a place where you can move faster and innovate on the edge with new

applications, you can weigh it out. the egg dependency companies are suffering. >> from a financial perspective, we see so much concern for companies about when and how they will go public. you guys have been through an interesting road to take companies have another time when there is this fantastic transition. i'm especially interested in finance generally but i wonder if you been able to make different kind of choices and what choices those are as a private company then one that was once public. >> it's very difficult for me to imagine how tings have migrated the last year. the 90 day cycle would not have work. our whole industry is going through a revolution to digital innovation. it forces you to invest very aggressively. we had to lower ebit. -- ibita. they let us spend $20 million more on r&d and investing in the

market. >> the income statements would say the same thing. oracle is a classic example where they are shifting a model away from a perpetual license business where they will see that shift of revenue which is smaller in the near term but longer in a longer-lasting way. they can make the decisions that the consequences are different. the ibm announcement about lowering their margins, if you're in a corporation where that happens, you are telling the remote -- the employees to remain calm and it will be tough to hire people it is the opposite for us. we are able to hire people from great companies because we tell them we will invest right now and not worry about the 90 day cycle. we will worry about the next 2-3 years. we can hire people and make investments on shift big dollar amounts into something new. some of our cloud initiatives for example.

we moved a large amount of money and if i had public, i would have to go to wall street and say i am lowering guidance on profit and that thing has consequences. you have this notion of creating product for the customer whether they needed or not. this innovation is happening around social and mobile and it's all about thinking how the customer will use your products. who all daybody long they think about only how the customers will use the technology and how they buy it and how they want to implement and service it. anytime we find something that is out of cinque for the way customers want to operate, his job is to put it on the hit list and we go after it aggressively. to a ceo that says the two people who don't listen in designing alex is the customers and the salespeople. their notion of what's possible is incremental.

it sounds like you take that approach where you try to create the thing they don't know they want. >> i think it was the henry ford quotation. there is a lot of truth to that. you have to look past the near term. you have engineering executives who look at what they need and the next iteration but you have to look past that. you have to look two years out and think how somebody will really use this technology differently. we came out with a whole new mobile app. we are one of the largest i.t. services company in the world and we came out with technology that will make the helpdesk go away entirely. self-service and we are enabling that and that's something the customers would not necessarily ask for but you know the market will demand we move toward that. all i can say is, go giants -- that's it for this edition of "armored west."

you can always get headlines at bloomberg.com. we will see you later. ♪ >> this is a special edition of "bottom line." in five minutes, the u.s. federal reserve's open market committee will release its monetary policy statement. the fomc has indicated it will end their third round of bond buying aimed at lowering long-term borrowing costs. let's get you set up for today's special broadcast. fed and weis at the will hear from him in just a few minutes. also joining me this afternoon in new york will be the chief economist of alternative investments at kpmg and kathleen gaffney and lead manager.of the bond fund also standing by with the wall aini,t reaction is mia s

what is the street expecting to hear from the fed? >> >> the traders i have been speaking to, many say they are waiting. three big benchmarks -- the dow, s&p, and the nasdaq, flat session for the past two hours. you didn't see the s&p and the debt -- you did see the s&p and the dow toggle between gains and losses. now we are pretty much waiting. minimizing some of the earlier losses as they are waiting for the fed to continue the same, more of the same. many analysts are saying that there is no conviction in the market. the expectation is that tapering will and but with the markets will be looking for, what market participants will be looking for, include forward guidance and specifically the language. more reportedly, what is going to be taken out, if anything will be taken out. recall that considerable time was afraid that many analysts and traders reacted quite dramatically to and it will be

interesting to see if that is a continuation with the markets now. markets pretty much flat. without minimizing some of the gains -- dow minimizing some of the games. >> mia, you mentioned the language again. michael mckee has been keen to point this out. will distribute watching that language? are they looking for nuance? >> is very important when it comes to the time of the, specifically whether or not we will see these lower rates for the time being. if the language comes out and markets don't like it, we will see a reversal of what we are seeing right now and there'll be a little bit more period of volatility. >> all right, mia saini joining us from the breaking news desk. she will be tracking the market reaction following the 2:00 release. we will be talking about quantitative easing.

this has been telegraphed for several months now, the fed says this last round of using would end at the end of this month. the markets are now down as we await the fed's decision. chief washington correspondent peter cook joins us on the phone with the latest. >> mark, quantitative easing has come to an end as expected. the fed cites substantial improvement in the labor market for that change. the fed is maintaining, however, forward guidance at the fed funds rate will remain at the current record low for a considerable time now that the asset purchase program is over. there is which in that guidance as well. there is also new language on inflation and there's also a new language on the economy, suggesting the fed is see some improvement. first of all, the forward guidance language. "the committee anticipates that it will likely be appropriate to maintain the zero to a quarter