cory: live from pier three in san francisco, welcome to "bloomberg west ergo -- west." stocks close a big month on a down note. overall, the nasdaq was up 7.1% this month, climbing within 1.2% of its march 2000 record. the biggest monthly gain since 2011. did comcast and time warner cable restrict entertainment companies?

the s.e.c. is investigating as it considers whether to approve the comcast/time warner cable merger. the s.e.c. has asked eight media companies including disney viacom, and fox to describe limits to online distribution in their agreements with comcast. uber says an unauthorized third-party access to its database last year and may have taken data on about 50,000 drivers. bloomberg says it has notified the impacted drivers. there have been no reports of missing [indiscernible] jawbone is said to be in contact with blackrock. the size and terms might change. the fitness company raised $500 million from investors including sequoia capital. competition is heating up with bit bit -- fitbit. and there is an apple watch in

the works. the public and presidential hopefuls are making their case for conservative activists. speech is going on all day at csppac. a common theme, getting rid of obamacare. senator paul: obamacare, at its very core, takes away a patient's right to choose. i promise you this. as a doctor, i will take it and make it my mission to heal the nation, reverse the course of obamacare, and repeal every last bit of it. cory: other speakers included jeb bush donald trump, and former senator rick santorum. congress is moving toward a short-term asked to keep homeland security up and running. current funding ends at midnight. -- at midnight if the house fails to pass a three-week stopgap spending bill. the has said they will not take

action on the plan that funds it until september. we are joined by peter cook. this was quite a stunning turn of events down on the floor of the house. peter: another rough day for john boehner here in the halls of congress. did not totally expect what happened on the floor a short time ago, but you had not only 172 democrats but 52 republicans bucking john boehner and opposing this three-week stopgap spending measure to keep the lights on at the department of homeland security. the idea on the republican party was to have the time to whack president obama over his immigration executive action. the rally is, in a few hours funding for this agency will dry up. boehner and his leadership team meeting behind closed doors to decide their next steps. they had a couple options. maybe short-term spending will get them through the weekend. or they could do what was almost unthinkable a few hours ago -- take up the bill that passed the

senate that fully funds the department of homeland security but says nothing about the immigration executive action. if the speaker does that, he is going to have a lot of angry conservatives in the republican conference upset with him. but they are already upset with him and did not back his bill today. cory: this raises all kinds of questions. are they going to stay there tonight and work on something or is it game over? peter: it was on the floor. there were working on votes trying to get the margin up at 217. it did not happen. house majority leader kevin mccarthy announcing to the somewhat stunned audience, other members of congress, they would be staying in town and could have boats through the weekend. -- votes through the weekend. they are deciding their next step. cory: i would like to volunteer you to stay there as well, peter. i will not do that. i wonder if this is what we are going to see from this congress or you have some hardliners on the right that are not -- that are going to keep a

congressional majority from forming even though the republicans hold the house. peter: this has been a really interesting week or two for john boehner and mitch mcconnell. we have seen a split between republicans, a different tactical approach in the house and the senate from what john boehner pursued in the house. they are clashing with democrats and the administration. democrats are somewhat gleefully standing back and saying, look what you got with republican control of congress, harry reid saying, this proves republicans cannot govern. democrats are taking their shots at republican in the midst of this, but can pick up the pieces and get something done in the short term. there are questions about how they challenge the administration and democrats, given their numbers here in congress. cory: what does this mean for dhs? what does this functionally mean? it seems like 80% of the staff is considered essential. do those workers get paid? we talked about cyber security a big issue with homeland security.

peter: those folks, about 80% of the 230,000 people who work for dhs, will remain on the job no matter what. if ending dries up they will not get paid. it will be a bad p.r. story for congress if that happens. they will be on the job, but there will not be funding for contracts, grants for cyber security, technology on the border. all of that is on hold until congress can get this sorted out. cory: the narrative changes. it looks like rather than talking about immigration, the argument could change. peter cook, thank you very much. we do appreciate it. that is the politics. what about the impact on cyber security operations? what would a potential shutdown tonight or three weeks put the country at risk to him online threats? i spoke with mark weatherford the former undersecretary for server security and now a principal at the chernoff group. he explains what would happen through the shutdown. mark: the cyber security

integration center is the focal point for the utter government working with the private industry. the umbrella underneath them is the u.s. cert urbanization -- organization. these are the mechanical organizations that are working with not just the private sector, but with the government as well. and they are doing the daily operations, the daily intake and output of cyber security information, working with the critical infrastructure sectors to provide them threatened ball information they are receiving, and to receive that, ingested, aggregated together, and disseminate it to the appropriate parties. cory: in other words, at dhs, an organization tries to find every cyber threat as it is happening and make sure that everyone who

could be affected knows about it . is that right? mark: that is exactly right. cory: that does not sound like something that should stop. it sounds very important. mark: it is important. that organization is not going to be affected in the short term. where there could be some impact is on the -- in the morale and the people aspect of this. when these things happen, the important point here really is that weise then a lot of time recruiting the talented people who work in this organization the very people we are starting to treat, i would say, inappropriately. there is going to be incredible pressure on them working in an environment where some of their peers are going to be sent home. cory: let me ask you finally about employment. there is no hotter employment field fence ever security right now. government workers are probably

not making top dollar. they could be making it in the private sector. this is not an axis tend threat to their job, but not getting paid and having this uncertainty -- this is not an x e existential threat to their job but not getting paid and having this uncertainty, what is the threat to the government being able to hire the best and the brightest? mark, private sector companies around -- mark: credit sector companies around the country are celibate in. i cannot name a single company i work with on a daily basis that does not have vacancies in the server security arena. this is great opportunity for people to start plucking these workers that are unhappy with the environment, and even -- there are going to be some employees that are going to be sent home. and these guys and gals that are sent home, they are not going to be sitting and waiting for the

call back from the government. they are going to be out looking for a job. when and if funding does come back, there are going to be gaps they will have to go out and recruit four. cory: mark weatherford, formerly of the department of homeland security, now with the chertoff group. ♪

cory: here are some cap

headlines. german lawmakers approved the four-month extension of a bailout plan. the vote in the bundestag was overwhelming. 29 of the no votes came from chancellor merkel's own party, showing signs of growing discontent with the greek bailout. the manager of the world's largest hedge fund is turning to artificial intelligence for bigger returns. bridgewater associates is starting an artificial intelligence unit. the team will develop algorithms for a trading team headed by david ferrucci who headed up the ibm watson unit. some sadness to report. star trek actor leonard nimoy has died at age 83. of course, mr. spock on star trek. the half human, half alien character came one of the most famous characters ever on television. he died in los angeles of chronic momentary disease he

blamed on smoking earlier in his life. a landmark vote. the federal communications commission with a big deal. everyone else is debating scottish dress colors, but the fcc was doing a monumental proposal to regulate the internet. the wild west days of an unregulated net are over with the new set of rules. joining us to talk about this, one of the commissioners who voted against the deal one of the two republicans who did vote no. joining us from washington dc -- washington, d.c. you did not carry the day. title to now reigns. what is the first pernicious thing we are going to see. -- to see? quick decisions about how the internet is going to work well instead of being made by engineers and technologists, be made by lawyers and bureaucrats. consumers are going to see broadband bills go up. they are going to tee up a proposal to impose a tax on broadband.

providers are going to see their state, property, and other taxes go up. those are going to be imposed on consumers as well. i think the wallet is unfortunately going to feel the pinch first. cory: the tax bill is a separate thing from title ii, yes? ajit: the regulations are going to be far-reaching when the fcc releases the plan. immediate effects in terms of the taxation are going to be severe also. cory: you have been carting around the 322 page proposal. that shows its have -- heft. you have seen it and the rest of us have not. ajit: i think the extent to which the fcc is inserting itself into virtually every aspect of how the internet works -- net neutrality traditionally was meant to encompass the relationship between an internet service provider and a customer the so-called last mile of

connectivity. a narrow majority of the fcc went beyond that to regulate such things as interconnections. even second-guessing service plans that wireless broadband providers might offer. in fact, there is still a lot of uncertainty about how these rules will be applied. the fcc leadership was asked how this internet conduct rule, a catchall rule meant to cover any internet conduct -- how will that work? he said, and i quote, "we really don't know." that does not give the industry certainty, and will it make consumers better off? cory: one of the interesting things we have not talked a lot about -- when i think about forbearance, it seems to me the fcc is saying, trust us. we will figure it out later. is that leeway a good thing or a bad thing? ajit: i think it is a bad thing especially if you see the document itself. some of the forbearance is hedged with those classic

washington caveats. "for now," "at this time." some of the forbearance that is not only granted -- it is sort of forbearance in name only. there is still this heavy-handed backstop of section 201 of title ii which i know is a little arcane. essentially everything is subjected to this just and reasonable standard the fcc is going to implement for the internet age. i think there is going to be uncertainty, a lot of regulation, and the so -- the forbearance will fade as the regulations ratchet up. cory: cory: net neutrality, netflix has complained that they felt compelled to pay to get a fast lane, and they were thrilled that this past, -- passed, so they will not have to make payments to verizon and comcast. that seems compelling. ajit: from an fcc perspective, it is going to be worse off for

everybody, providers and isp's. the fcc does not have the expertise to determine what the agreements reached in terms of interconnection -- most fundamentally, the question is this. do you want an unelected bureaucracy, three bureaucrats in particular, to make decisions about how the internet functions? or do you want to rely on the bipartisan, light touch regulation we have had over the last 20 years that allowed companies like netflix to grow tremendously and reach commercial agreements with isp's that both sides ultimately live with? i would rather have a free market approach deliver consumer value, as opposed to having washington bureaucracy make those decisions. cory: title ii has some interesting hair on it in addition to the transit rules. things like privacy have some specific requirements. i wonder what that means for a company like google, which is providing last mile transit in a couple of communities and a few

more to come, but also the big businesses involved in mining customer data. i wonder if title ii means google has to abide by different and ministration and privacy rules. ajit: silicon valley tech companies that have been pushing for net neutrality should be careful what they wish for. now having classified internet access as a title ii service and treated the entire internet as a utility subject to fcc regulation, one part of title ii is section 222, which involves privacy. there will be a tremendous push to impose regulations on all aspects of the internet, not just the isp's, but the edge providers, to adhere to more onerous privacy restrictions. you wonder whether the administration and fcc go down that path. that is one example of the pandora's box that has been open since two title -- thanks to title ii. cory: sit with us over the

commercial break, and i want to talk about municipal broadband another important thing the fcc does. be right back. ♪

cory: i want to get two more minutes with the fcc commissioner. you guys will yesterday that state laws, at least in two places should be overturned, or they should get an exemption, in chattanooga and wilson, north carolina, to offer local broadband. is there actual competition in the world of broadband? ajit: i think there isn't enough competition. one of the reasons for this exemption is strictly a legal one.

i do not take a particular view on any given municipal broadband project. some people say they are useful, injecting competition into an uncompetitive marketplace. i step away from that entire debate. focusing solely on the question before the fcc, under the constitution and the laws of the united states, does the fcc have a legal power to block state law regarding municipal broadband? based on the reading of this president, i say the answer is no. cory: that aside, i have seen statistics that say 75% of americans have only one choice when it comes to broadband, and that is going to be a big issue in a lot of places, because our connection speeds are not as fast as other parts of the world. ajit: this is one reason i said the fcc, instead of focusing on net neutrality, which does not address a current problem, should focus on broadband competition. title ii will drive competition out of the marketplace. we heard from thousands of

wireless companies and small cable companies who said title ii is a tremendous mistake and they do not have the resources to comply with these regulations. we pushed some smaller comes in the marketplace, fewer options for consumers. cory: so it is a problem? ajit: i think it needs to be sought through market-based solutions, not government regulation. cory: does that mean you are going to vote against the time warner/comcast merger? ajit: the merger is pending before us, so i cannot comment on how it is going to proceed. generally speaking, a lot of people are interested in this precisely for that reason. cory: i had to ask. thank you for coming on the show. ♪

cory: you are watching "bloomberg west." secretary of state john kerry said the u.s. is considering removing cuba from the list of state sponsors of terrorism. that decision is separate from the talks to normalize relations between the countries. president obama wants embassies reopened by april, but cuba wants to be removed from the terrorism list first. priceline group has named a new ceo of priceline.com. the online travel booking service's current ceo becomes

chairman. he has been -- the new ceo has been the marketing officer of booking.com and a big driver of growth. last year they purchase the restaurant reservation service opentable. french media conglomerate vivendi is planning to return 61 $4 billion to shareholders. the company -- $61.4 billion to shareholders. the parent of universal music group's stock nearly quadrupled in the fourth quarter. they will no longer preinstall advertising software on pc's and apologized for including adware on consumer laptops that forced users to hack it. lenovo said it has worked with partners to eliminate the adware and will offer users a free six month's instruction to mcafee antivirus services. the u.s. loses oil rigs for the

12th consecutive week. baker hughes said u.s. rigs fell by 43 last week, at their lowest level since june, 2011. crude prices headed for a second straight week of losses. it is friday. pop some popcorn. let the binging began. season three of "house of cards" is finally out. the notion of binge watching -- how many are watching this thing? netflix will not tell us. joining me from new york, paul sweeney. do you love the show? i love the show. but, you know, we are overpaid white guys in a particular demographic area how big is this show? we do not have real rating numbers for this. paul: you are right. networks does not release ratings for individual shows at all. the only thing investors know is, the company has been pretty clear that some of the original

programming like "house of cards," "orange is the new black" have riven subscriber growth. they feel confident that investments in original programming result in growth in subscribers, the lifeblood of the growth of their business. more subscribers around the world allowed them to invest even more in original programming, which drives subscribers, and so forth. from their perspective, they need to be big players in original programming. cory: there is a group called civic science that tried to put some numbers of approximately 14 million users, a quarter of the overall audience of netflix. i think it is largely, if i can think of a word, in terms of how netflix has changed its business model from offering second runs on movies first time online, to offer original content. paul: netflix is tearing a page

from the playbook of hbo. when hbo came into the market 20 plus years ago it was simply a place to see movies after they came out in the theater. about 10 years ago, hbo started investing in its own original programming, like "the sopranos." i think netflix have really studied hbo and the success and growth of hbo. i think netflix knew all along that they could not simply be a rebroadcast or, if you will, of reruns of movies and tv shows. while that still maintains a very large part of their total viewership, i think in an effort to differentiate themselves in an increasingly competitive video market, they needed to create their own individual programming, find some hits they could brand a little bit and used to drive subscriber growth. they have had successes, but also some misses. they are no different than any other created entity. cory: before hbo had "the

sopranos," they had "arliss." before that, they had a successful business. netflix did not. this is the principal driver of subscriber growth. what happens when it is marco polo, when "house of cards" is over and flops happen? it is hard to make hits. paul: we have seen it across hollywood since the beginning of hollywood. it is a hit-driven business. however, netflix does have a very large library of movies and tv shows, which continues to drive subscribers and continues to drive the amount of time spent with netflix by its users. clearly they are aligning their stars more and more with original programming, which heightens the whole programming risk to the netflix story, which was not there in the early years. the payoffs are big, as we have seen time and time again, particularly if they can own the programming on netflix. they do not own "house of

cards." cory: i wanted to get to that. it is a big deal. you read through the fcc filings, you see the rights go back to the producers after a certain time. paul: there are certain markets internationally they do not have the ability to show "house of cards." it is important to not only sell original programming, but get into the ownership. that allows them to have full global distribution rights. most importantly, it allows them to benefit if the show is a hit. long-term syndication rights over other media and distribution platforms -- much like big hollywood studios make money with a very long tail on some original programming they create. what we are seeing for netflix is getting increasingly into original programming. they are one of the most important buyers in hollywood today. the chief content officer at netflix is one of the most widely accepted people in hollywood, because he has a big

checkbook and is willing to write some checks for programming, and for original programming. it is a good strategy for them. it has worked for them to date. it does interject a level of risk into the story. cory: are you really going to binge watch this this weekend? paul: probably not time to binge watch, but i am definitely going to get started. i know there is pent-up demand from a lot of such drivers. cory: -- of subscribers. cory: thank you very much. ♪

cory: the mobile world congress is going to take place in barcelona, spain on monday. it is a big deal, and all the biggest names in mobile will be there. companies focused on this -- one is intel. intel is from new york.

kirk scoggin joins the right now. why should we care what happens in the mobile world congress this year? kirk: evil world is getting more smart and connected. this is the main event where people launch products and talk about what is going to be more exciting. cory: what is going to be exciting? kirk: intel has been known as a pc company, and will announce a new lineup of computing and communications chips. they will make consumer devices, whether they are phones are tablets, higher performance and longer at her life. -- longer battery life. there is an attempt to eliminate wires and move the world to gesture, a new user interface for computing. good stuff. cory: backup. no passwords? i love that. kirk: we interview hundreds of thousands of people a year. what is frustrating people is those passwords, the ones you have to do every day, as well as

trying to get in your 401(k) account on the weekend. our job is to basically make your face your password. five years from now, we will be wondering what the heck does things even more. cory: what is the technology around that? we are constantly doing cyber security stories on "humbert west," talking about the -- "bloomberg west," talking about dual identification, biometrics. kirk: at intel we are merging hardware and software technologies together. we have launched a new product called tricky, where you can use multifactor authentication. that means multiple factors like your face, your fingerprints, or your voice to be able to login. whether it is logging into windows or your favorite websites, no more passwords as we roll this thing out. cory: when we look at the internet of things business, you guys put some numbers up and the revenues are something

serious. is this a place where sort of mobility matches with the internet of things, and you end up having a presence in the mobile world, even if it is not the main chip in a cell phone? kirk: the internet of things, everything is getting connected to your vending machines and kiosks. we are a committee case and's company. we will be launching 3g silica in. our job is to make things more connected. this 5g standard is something we will have the lead on, and can work with the industry to make it happen. tens of billions of devices come online. cory: i talked to some fcc commissioners about how although america is far ahead in 4g, 5g could be a challenge. what do you expect in terms of rollout, and where is that going to happen? kirk: this takes years to work on. but we are confident the industry is going to work together. that is a lot of what we do at

the whole world congress working with standards bodies around the world. your usb connector on your pc, our job is to make sure we roll that out faster, and the mobile world congress is one of those places where we have the meetings to make sure that happens over the next couple of years. cory: a few years ago, one of the big ideas that came out of the congress was wireless charging. it still has not taken off. why is that? kirk: over three different standards bodies. now the powers alliance and the a4wp alliance are merging. the same way you charge or wearable device is the way you will charge, tablet, and pc. for the end of the year, you will start being able to charge their tables at coffee shops or your airport lounge. intel will start launching the first tablets and pc's where you can keep the power brick at home. maybe 3-5 years from now, you will be wondering, what is a

password, and why did you ever connect something with a cable to your pc and it starts at the mobile world congress. cory: i am still trying to explain to my kids why phones had dials. they do not get that either. kirk scoggin, have a safe trip to barcelona. i cannot wait to see what you find. some top stories. the former aig ceo has died at the age of 70 at a medical center, with his family by his side. he had been undergoing treatment for lung cancer since 2010. the government bailed it out. retailing the bailout in full, there was a profit of $23 billion to the u.s. government. google has submitted plans to redesign its office space in mountain view, california. google wants to develop existing sites where it already has buildings on highway 101, and want to increase their square footage. the first will not be finished until the first quarter of 2020. shares of weight watchers are

walling the most ever today losing -- falling the most ever today, losing a third of their market value. weight watchers struggling because of digital fitness trackers like it bit -- fitbit and jawbone. those are eating into their business. get it? ♪

cory: yesterday, i got a surprise invitation from apple. this time, march 9, they are announcing an event. we suspect the apple watch will be announced in greater detail. the invite says "spring forward," perhaps a reference to daylight savings time the day before. apple has said it plans to start shipping the watch in april, but the campaign is in full swing. check out "vogue," as i always

do. 12 pages of an apple ad. we are joined by the ceo of the june group, an advertising group whose clients include mcdonald's and coca-cola. is that my copy or your copy of "vogue"? it is the march issue, a big deal. visit the impact of angela aarons -- ehrens, who came from bloomberg? tim: this device is going to be technology driven, but also very stylish appealing to people that buy things for fashion. cory: mitchell, what do you make of them taking out this big ad in "vogue"? mitchell: it is clear it is more about fashion and function. i think there have been reports that actual functionality has been scaled back even from the original spec. it looks like they are going to make this a must-have accessory.

cory: talk to me about this. apple has always been sort of brand focused. i wonder if this is a different take for them. mitchell: it is terranova for them, their first big foray since the ipad, and they are getting pretty big on it. it is interesting they are taking this fashion look at it. cory: i wonder if apple is going to start to have a product line at much different price points. what did you not know before you saw this? tim: you just hit on the things we have seen before the style. it is more about the placement. in "vogue" in china, doing things in paris to get into the fashion world. there are big questions a lot of people want to know in march when they do this event that

really will be about the watch. we only know the base price will be at about $350. cory: that is a steep initiative. tim: we do not know about the battery. if you wear it all day with a charge people are looking at that. the case for why you were going to want this. is it going to be just for style, or is there going to be functionality to it? apple has laid out the entire use case for it. why you want to buy it? cory: is fashion when to be enough to sell the millions of watch as they need to make this business work? mitchell: i think initially it will be. i think apple has the kind of panache that will make a certain class of people, the early adopters, go and buy it. i do not know if it will carry long-term. i think it will have to have

useful functions to make it a part of our day, the way so many of their other devices have become. cory: you expect to see more of these ads and other places? what would that tell you, depending on where they appeared? mitchell: my guess is, you will see more ads. this early indication tells you that is the way they are leaning. i would expect a lot of print. i would not be surprised to see beautiful television pieces. the thing is, they are betting so much on it. every major release they have had since the steve jobs era has been the must-have device. as you indicated, this is a little different, so i think they have a lot riding on it. cory: appreciated. thank you very much. it is time for a special bwest byte, one number that tells us a whole lot. i have a special bite from someone. -- byte from someone. emily: do you recognize my voice? cory: we all recognize the voice

of emily chang. what is the bite? -- byte? emily: first of all, do you miss me? cory: come back. i keep begging you. emily: the number is four. do you know what that is? cory: i heard a child in the background. i love that. tomorrow is the four-year anniversary of launching the show. emily: four wonderful, long years. cory: they are running the hair video, video of all of your hairstyles. i told them not to. emily: i knew you would not be able to resist even though i am not there. you would not be able to resist that clip. cory: you look great as always. we really miss you. i got a phone call the other day calling from god knows where saying, what happened to ms. chang? is she coming back?

and you are coming back in april, i hope. emily: i am sorry i cannot be there today to celebrate this very momentous occasion, but i promise that we will have a big blowout for the five-year, all right? cory: i like that. i have got to thank everyone who has worked on the show and the team we have working so hard in your absence because we have a lot of ground to cover. the viewers have been really supportive. it is a very different thing to not just talk about what investors want, but what businesses do. [baby babble] it has been great to have you by my side. emily: the future of business. the most important show. i cannot wait to be back in april. cory: i love hearing your son amalie: i am calling from the home front. i hope you do not mind.

-- hearing from your son. annalee: i'm calling from the home front. i hope you don't mind. ♪