♪ emily: i'm emily chang and this is "the best of bloomberg technology," where we bring you all of our top interviews from the week in tech. coming up, the end of net neutrality. the fcc votes to kill obama-era rules for equal access to the internet. plus, a massive merger that could shake the media landscape for decades to come. disney is buying fox assets for more than $52 billion. we will hear from disney ceo bob iger. and the winklevoss

billionaires. all thanks to what else? bitcoin. they explain why they took a chance on cryptocurrency. first, to our lead. net neutrality is no more. the fcc voted to repeal the obama era internet protections designed to keep rock band -- broadband providers from favoring content. vote was 3-2 to end the protections known as net neutrality. the vote came amid intense protests online and in person from defenders of the rules, who say this will create have sent s band have-nots when it comes to accessing content. fcc chair ajit- pai heralded the return to what he calls a free-speech market approach, saying it is time to restart internet freedom. the light touch framework that has governed the internet for most of its existence. joining us now, one of the people who voted to repeal it, fcc commissioner brendan carr, who was nominated by president trump. commissioner carr, thank you so

much for joining us. you said today is a great day, many people say this is an awful day. what don't they understand? >> thank you for the question. it really is a great day for consumers, innovation and freedom. there is a lot of apocryphal rhetoric out there. here is the reality. we are voting to go back to the 2015 regulatory framework, the title i framework that the commission had in place for the 20 years before 2015. this is not moving toward some mad max version of the internet where isps will have complete free reign to dictate your online experience. the 2015 framework had strong legal protections for consumers. consumers will benefit from that without the harms we are seeing from title ii. emily: that said, a number of organizations say they plan to sue the fcc, an activist group saying they will sue on the basis of broken process, flawed legal reasoning, willful rejection of evidence and this

disregard for public input. the attorney general eric schneiderman is saying this is not just an attack on our internet, but on all new yorkers and the integrity of every american's voice in government. we will fight back. what is your reaction to these comments? fcc takes ane action in the space of internet regulation, there are lawsuits over the decision we make. here is the reality. the supreme court in 2005 took up the fcc's authority to classify the internet as a title i authority, and they found that the fcc did have the authority and that is the only classification the supreme court has ever found. so the decision here, both as a procedural matter and a substantive legal matter is on a sound legal footing. i'm confident in where we go from here. emily: we spoke with the former fcc chair tom wheeler, who oversaw net neutrality and look at what he told us.

>> for the first time since 1934, with this decision, the fcc is washing its hands, walking away from that congressionally mandated responsibility, and they are only doing it for the most important network that will define the rest of the 21st century. it is an inconceivable kind of action. emily: what do you make of this accusation that the fcc is absolving itself of responsibility, rather than taking responsibility? commissioner carr: that is simply not the case. we are going back to the same framework that was in place in 2015. i think your listeners and viewers can remember the internet of 2015. it was not a free-for-all, there were protections. those protections will be back in place. again, the federal trade commission is going to be fully empowered for the first time in two years to police isps conduct with respect to consumers.

the fcc's 2015 decision struck the federal trade commission of 100% of authority to protect consumers from isps. another piece of that is online privacy protections, which consumers care deeply about. the ftc is the nations premier destination's -- nation's premier consumer protection agency and has been prohibited from taking action because of the title to decision. the consumer is gaining protections. this is not a situation where there are no rules in place. emily: comcast has said they won't invoke paid prioritization, but let's say they do. what would happen? brendan: what happens here is there is a misconception about what title ii did. right now, it is not stopping providers from blocking websites, creating fast lanes, paid prioritization. there are reasons why that stuff is not taking place today. it is market forces regulating the conduct and after our decision, those forces stay in place. there are a lot of people who don't believe in market forces and that is fine, there are

actual positive laws we are putting in place as well. federal antitrust law prevents isps from entering agreements that unfairly block, throttle or create anti-competitive pay prioritization. there will be rules out there that will be able to police any of this conduct that people are talking about. emily: what about the fake comments in the public comment section? doesn't that give you any pause? one million comments were written, potentially by a robot, to counter the vast majority of comments that were against this repeal? commissioner carr: it doesn't give me pause, and here is why. we have run an open and transparent process. it is clear how we run our rulemaking and record. we have an open record. anybody that wants to file a comment can file a comment. we don't require identification

on the front and because that would discourage robust conversation. we had over 24 million filings in our proceedings. i think that shows the passion people have in the issue. our decision is based on the substantial record evidence that we developed. emily: the vast majority of those comments were against this repeal. commissioner carr: there was a wide range of views expressed and the question we have to confront is a threshold legal matter for the fcc. did congress, when they set up title i of the communications act and title ii of the communications act, did they intend the internet to be in one or the other? when you look at that legal determination we have to make as commissioners at the agency, it is clear this is a title i information service. emily: when will we see lawmakers actually enact this into law? commissioner carr our decision : today goes into effect as soon as the omb and other government agencies review the transparency rule we adopted, and it will take effect shortly after. that is the timeline we are looking at.

emily: how do you see the internet -- let's say the internet five years from now, being different? already, it seems like so much power is consolidated in the hands of a few powerful companies, many of those were against this repeal -- but how does the internet look different to you in five years? commissioner carr: a good question. that is why this is such a great decision. title two is a monopoly style regulation, a heavy-handed regime. a lot of the debate has been about at&t, comcast, verizon, the big isps. i think they have been negatively impact, as our record shows, but they also have an army over your tory lawyers that can wade through the title to requirements. -- title two requirements. when i talk to consumers, they want more competition and that is where title two heads in the wrong direction. there are thousands of small isps that are trying to provide service to consumers for the first time or provide competition to larger providers. those are the ones who have been hurt worse by this decision. when we repeal--

this title two role, those providers will have an easier time competing, getting money and consumers will benefit as a result of the increased competition from repealing title two. emily: that was fcc commissioner brendan carr. tesla is getting its biggest known truck order yet from pepsi. the preorder is for 100 vehicles , worth an estimated $102 million. walmart and anheuser-busch have placed orders. production is scheduled to start in 2019. and consumer edge forecasts the tesla truck could generate $300 billion in annual revenue for the company. coming up, disney is about to become an even bigger force in hollywood after reaching a deal to take over fox assets. what does it mean for the future of moviemaking? and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com and on sirius xm in the u.s.. this is bloomberg.

♪ emily: this week marks 37 years since apple became a public company. founder steve jobs was 25 at the time and held the chairman title. the company sold 4.6 million shares at $22 apiece and since then, shares of apples are up more than 49,000% with a market cap of $800 billion. well, a mega-media deal has been reached after weeks of speculation. disney is snapping up a large chunk of 21st century fox assets in a deal valued at more than $54 billion. the biggest acquisition at disney today's. with bob iger in l.a., and he explained how the deal came about. >> a year ago, i didn't see this one coming either. i did not see it coming six months ago. rupert and i have known each other a long time, have a lot of respect for one another and occasionally get together to muse about the business. we had a get together this summer where we were talking

about the disruptive forces we were seeing and the relative position of our companies. i left thinking there might be an opportunity for us to do something with him. i thought about it for a few weeks, called him thereafter and suggested maybe we should get together and talk about it, and we did spend some time analyzing whether there was something to be done and what the value proposition might be for shareholders of both companies and ultimately, rolled our sleeves up, got into a negotiation and here we are today. i think what we are doing is creating not only a great company, but a great global today. opportunity for consumers to not only consume great content made by both entities, but to consume it under circumstances that are innovative and compelling and much more user-friendly. that is what the consumer today demands. >> we learned about your future now, stepping down in 2021 versus 2019 previously, what is the future for james murdoch? bob: we have talked a lot about potential role for him. he will be integral to the

planning of the integration process and we will continue to talk about where there is a role for him at this company. we have had a good relationship and he has been extremely helpful in this process. i look forward to talking to him more about it. jonathan: a lot of people are thinking about a succession plan at walt disney and are thinking james murdoch could be a part of that, is that something you could see happening? bob: i am now extended through 2021 and the board of the company will have ample time to consider its options in terms of my succession and reengage in the planning process for that. it is premature to speculate on that. it would ultimately be a board decision. emily: here to discuss everything we need to know about the deal, we are joined by bloomberg's chris palmeri in l.a. walk us through. iger said he didn't see this deal happening and there was speculation about it for some time. walk us through the nuts and bolts of the deal and what it means. chris: thankfully, the bulk of what we know of fox is that most of its entertainment assets are

going to disney. the fox studio, the national geographic channel, a lot of international assets, the company's stake in sky, a big satellite provider in europe, it star.s it is a massive chunk of fox now merging with disney. emily: what do you think of this idea that james murdoch could be iger's successor, even if it is years from now? chris: there was a lot about this going into the announcement that he would be named as some sort of senior role at disney. it was kind of a surprise today was that nothing happened. neither side ruled it out, and bob iger said he expects him to have an advisory role in integrating the two companies, but nothing clear yet. and bob saying now he will stick around for four more years. it is hard to say at this point that james murdoch has any real clear path to the ceo of disney.

emily: this is disney's biggest acquisition ever. how does it fit into the context of their prior m&a? chris: previously, it was about content. you know, they made smaller technology deals, but it was basically about bringing all these wonderful characters, film division and here, it is a much broader play. it is really a doubling down on the film and tv business at this very pivotal moment where things are changing so rapidly. we will see a lot of exciting things out of disney from a technology standpoint.

bob iger sketched out a multi-pronged strategy. he will have an online version of espn launching next year, a disney branded channel in 2019 with all this marvel and star wars content, and hulu, which they will now control a 60% stake, will be the adult version of what they are trying to do and that is where fox really comes into play with some of its programming. they are trying to create an online choice for everybody. emily: that was bloomberg's entertainment reporter chris palmeri. coming up, t-mobile's big plan for the small screen. we will hear from the telecom giant as it prepares to take on tv. plus, apple is roughly -- apple's roughly $400 million bet on facial recognition technology. we will break down the investment. this is bloomberg. ♪

♪ emily: t-mobile u.s. has announced plans for a disruptive new tv service set to launch in 2018 and signed a pact to acquire layer three tv to build out the strategy.

we caught up with mike siebert, chief mobile officer in denver discussed the motivation behind the deal. >> this is a market that is filled with pain points. if you think about it, it is the most hated industry in america. top companies with 10 the worst customer service ratings in america are paid tv companies. with our brand as the uncarrier and solving pain points in wireless, we are poised to make a big difference in this $100 billion paid tv market. emily: at&t and verizon have been exploring the online video market as well, a step beyond the slowing wireless business. how is this different than what they are doing? mark: what you see from at&t is more of the same. you see -- i mean, their way of getting into this was to buy directv, a traditional satellite-tv company, and create bundles that people don't want.

i mean, in order to get a decent deal on at&t wireless service, you have to drill a satellite dish into the side of your house and be fed linear, one-way, uncontrolled tv services from outer space. it is no wonder people are leaving this industry in droves. there is negative growth of 2.5% in this industry, but that doesn't tell the whole story. millennials and gen z customers are leaving at rates of 25% a year. they are abandoning old fashion ed, linear tv like satellite-tv. at&t's strategy is wrong. what we are offering to do is bring together the best of mobile video and home tv and create something that is totally disruptive in a market that needs disruptions really badly. emily: your ceo is saying he expects a deal to close in a matter of weeks. what are your regulatory concerns given the doj's opposition to at&t and time warner? mike: we don't expect any. we will close it after the new

year. -- this is really exciting for us. we just met with the team at layer three tv, who will be a key ingredient of this new t-mobile strategy. what incredible technology and what an incredible team, because we are going to build a service that people have never seen before. think about the services that we are forced to live with today's linear tv. you get this program guide and a little v-pad remote control. that pales in comparison to the engagement of social media fed mobile video that our customers have come to love. so we are going to bring together these worlds and make tv not an island of its own anymore and really change things up. emily: the possibility of a sprint-t-mobile tie up has been simmering for years. it still has not happened yet. what is the status of that and what are the chances of it happening still simmering for years. in this regulatory environment? mike: as you know, we looked

long and hard at it. -- mark as you know, we looked : long and hard at it. it is a shame it didn't come through because there are benefits to a merger like that. we were looking at layer three tv and the launch of t-mobile into the tv experience with or without that deal. it made sense if we did that deal and it makes sense by itself. there is a reason -- this marketplace is a market that is moving way too slowly and it is serving customers' needs. it is a $100 billion market that we are in an incredible position to disrupt as standalone t-mobile. emily: you are saying a sprint-t-mobile merger is completely off the table, will never happen? mark i'm not : saying that. i'm saying we looked hard at it and it didn't happen. we are doing now as a team is we are doing what you would expect us to do. we are focusing on running this great company and boy, it is a great company in a great space. we are the only ones with service revenue growth. we just finished 18 quarters of

acquiring more than one million subscribers a quarter. the main thing people need to know is as you look at t-mobile as a standalone company, all these worlds are converging. we like to say that all content and communications are landing on the internet and the internet is transitioning to mobile. here we are, leading and the only growing mobile internet company. so we are in a great spot. emily: that was t-mobile's coo mike sievert. apple's appetite for deals grows. investing nearly $400 million in finisar, a maker of laser technology that is critical for new iphone x features like facial recognition. this coming days apple -- after apple confirmed it bought shazam for an undisclosed amount. with -- spoke with tech reporter mark gurman. mark: this is part of apple's

billion-dollar pledge to invest in manufacturing in america. this has come on the heels of president trump's proclamation about anything and everything being manufactured in the u.s. $100are investing about million in a texas company called finisar. they make lasers they can put in air pods to little black circles in air pods, those are lasers shooting into your ears. they know if they are in your years. if you take them out of your ears, they stop laying. they also have a laser used for facial id. it is an extremely important component for apple's latest string of products. emily: it is currently in the iphone x? mark: they are using sensors the iphone x, in and now they are investing it and will put a chokehold on that market of sensors so they can use them in products down the road. emily: how many jobs are they creating here? mark: lots of jobs. with a $390 million, finisar will be up to reopen in texas that previously shut down and

will be able to rehire a bunch of people that could work at the facility. emily: well this eliminate supply chain problems? >> that will ensure money is $390 million invested in the components apple will need. ony will be able to work that. emily: right now, this tech is being used in the animoji tech. >> it is based in face id and that replicates with an emoji. and iphone x can scan your face, knows it is you, then the lasers can be used for animojis. it knows if you are smiling, shaking your head, it is also used for the air pods as well. so there is broad application for the tech. emily: gene munster says it gives a competitive edge when it can be used for animojis. comes to ar. would you agree? mark: absolutely. apple has been ahead of the pack in ar. they are one of the first companies to recognize the importance of ar over vr for glasses and phones. so you are seeing apple

investing more deeply in this technology, more than samsung or google has done in recent history. emily: you reported earlier this week on apple buying shazam. how does this new news give us more insight into their m&a strategy? are they on a spree? mark: that is a good question because you see two different paths happening right now. you see apple doing more investments, technological investments in order to prepare for its future, but also big-time acquisitions said as what you saw with shazam. they bought the whole company, the technology, resources, the people, and they want to integrate the company. that is one arm of their m&a strategy. the other arm is these big investments. not full on acquisitions, but giving companies money to have enough resources to build components apple needs down the road. emily: and you think we will see more of this? mark: i think we will see more on both paths. emily: coming up, the winkle voss twins may have missed out on becoming billionaires, but bitcoin has them joining the club.

that's next. a reminder, all episodes of bloomberg technology are livestreaming on twitter. check us out on technology at 5:00 in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪

♪ emily: welcome back to the best of "bloomberg technology. i'm emily chang. bitcoin's massive rally is helping lift up some of its overshadowed competitors. such as light coin, the fourth-largest cryptocurrency, search this week to an all-time high. this on optimism bitcoin will attract to the fledgling market. twinseek, the winklevoss cofounders of the exchange , gemini, thought to be among the biggest holders of bitcoin , spoke to bloomberg about why they made such a big bet. >> we think bitcoin is like gold 2.0, so whatever your reasons

-- investing gold durability, portability fungibility, we think bitcoin , matches or beats gold across the board in all those categories. it is not scarce, it is fixed. you can send it around like you send any mail -- an email. it is hard to do that with gold. the market cap of bitcoin is 300 cap300 billion, the market of gold is $6 trillion. if bitcoin disrupts gold -- we have been saying this sense the market cap was we are 300 times $1 billion. more correct today. we think we will be more than 20 times correct here on out. >> is there any reason people are selling gold and buying bitcoin? >> that is possible for sure. anybody who likes the characteristic of gold in their portfolio definitely will be attracted to gold. bitcoin, excuse me. >> i like that you mentioned that because we had a note

talking about that, and from this research, he has not seen that yet because they have not seen outflows of gold. they look at a different kind of supply and demand dynamic and what bitcoin will be. >> you said you could be 20 times more correct than you are now. in other words we could see 20 , or 30 fold increase and up -- in the price of bitcoin. how do you get there? even people who are positive on bitcoin, many say we could see a sharp correction. it might go back up, but it could be a rocky road to get there. >> part of that is trading access to it. we built gemini.com. it is a licensed exchange custodian, trust company. we launched two years ago. we are headquartered in new york. so it makes it easier for hedge funds to get involved. we have some of the world's most sophisticated or's market make -- sophisticated market makers and traders on there.

based two is creating a futures contract. a bitcoin futures contract is cash settled which allows institutions already trading in chicago exchanges to get exposure to bitcoin with cash and settle out in cash. they do not have to touch or feel bitcoin and they get the exposure to it. would bephase of that something like an edt, etf product. >> would you had introduced, you had a filing with the sec, it was pushed back, like it has with all the filings. are you planning to refile? what is the next step in the process? >> we are in process, we do not have to refile because we are on appeal be. -- appeal. we are just waiting to be heard right now by the commissioners. >> what is the next step with the cme? we have the cbo up and running, what about the cme. it would be be based differently than gemini, which you cofounded, but taken from a

combination of different exchanges. >> our contract settles to the gemini auction. we really love our product does -- because we think it is simple and easy to understand and arbitrate between the future price and the current spot. we welcome them to the party. they are settled on a blended index so it is a different flavor. but we welcome more products and more price discovery in this market. >> when contracts are being launched, one of the issues is that daily auction values can be very light on gemini. that can be difficult for the exchange if you do not produce a price. what have you done to address that? >> auction mechanisms are tried and true. we think the mechanism we chose is straightforward and simple, and it will naturally, organically grow as this contract grows. so we are not really concerned. we run auctions every day, even holidays and weekends.

those might be more thinly traded, but on weekdays, that is where you want to focus. it is the largest global liquidity event in the entire bitcoin market. it may be small. >> $1.3 million average. >> if you look at 4:00 and the constituents of another blended index, and at 4:00 in time, one -- $1 million, $2 million, a $3 million print is quite large. increased price discovery. and a lot of these auctions are self-fulfilling. you have a contract price into it so it builds the reason or relevancy of it. so it is sort of unfair to take a snapshot in time before there is something tied to that price. >> you guys are one exchange. many times you see diverting prices on these different exchanges, which can make it difficult to treat bitcoin, and -- trade bitcoin and certainly more difficult to transact in bitcoin.

what do you think causes more price stability? does bitcoin need to be transactional at some more than point it is right now? >> it depends on what exchanges you are talking about. not all exchanges are created equal. we are in new york trust company. we are the most regulated bitcoin custodian and exchange in the world. when you look at the prices across the u.s. exchanges, they are regulated, it is a small deviation. they very much track each other. if you're talking about unregulated offshore exchanges in different jurisdictions that are highly risky, there is going to be risk premiums. sometimes people cannot get their fiat currency in or out. >> coin base is u.s. based and it is priced different from the other exchanges. >> it is all about getting more sophisticated players in the ecosystem. the bitcoin futures product will ever bitcoin

futures product in the seatbelt will create for the first time an easy way to short bitcoin. there will be a two-sided market which will reduce volatility in the long run, increase price discovery and liquidity. emily: that was tyler and cameron winklevoss, cofounders of gemini. who else is riding high on the cryptocurrencies bike? tom metcalfe covers billionaires wealth for -- billionaires and wealth for bloomberg. let's start off with the winklevoss twins. how did they amass such a stake , and how big is it? >> you can trace it back to facebook and mark zuckerberg. in that, they each got about $20 million -- they got about $20 million in cash and about $45 million in facebook stock. they used that to go into various investments, and one was in 2013 they bought $11 million worth of bitcoin. we have been tracking the price of that, and in december, that $11 million has reached a market

cap of about $1 billion. after the last week, it has risen to $1.7 billion, which has effectively made them both billionaires. as long as you can liquidate that bitcoin holding. emily: is it true the vast majority of bitcoin wealth is held by a very small number of people? >> there is some very interesting reporting out of bloomberg. there are dozens of whales who own 40% of the currency. an interesting point of contention is if someone wants to sell out, a big $100 million, how will it affect the market? a number of big players their , sales will influence it, in terms of other equity markets, much more limited volume and trading. emily: do those whales hold and -- hold an oversized amount of influence in this rapidly developing and uncertain new

market? >> definitely. you can see that in these big fluctuations. it is very hard to call, nobody knows when they are coming. and nobody really knows why and how. when big sales come through prices take a massive hit. similarly, what is driving the current price right here is plenty of regional players coming in, but it is the big boys who cause most of the movements. emily: you have been tracking a little-known business that is called cryptocompany that is on an even wilder ride than bitcoin. explain. it is a company saying they will invest in bitcoin. it is called cryptocompany. its market cap is incredible. was intook a look, it the hundreds of millions, and in this week it alludes to $12 billion. it has for -- holland now to $4.5 billion. and it goes back to these numbers are not as authentic as a bitcoin price. but on paper, the founders who

set this up in june or something like that have built a $1 billion stock position, but only on paper, really. the volatility is based on very, very thin volumes of $1 million or $2 million. emily: another interesting story, about the involvement of women in the cryptocurrency market, which was initially -- as most things are -- dominated by men, but the subhead is that bitcoin is welcoming to anyone who drinks the kool-aid. >> exactly. it is really -- that is the whole nature of it. it is an whole -- a whole open opportunity. anyone has the chance to exchange the future of finance. emily: coming up, california governor jerry brown explains why the state is leading the charge on climate change, and how silicon valley is joining the effort.

plus, goodbye ireland, under pressure from tax authorities. facebook declares they will no longer funnel taxes through its irish subsidiary. this is bloomberg. ♪

david: this week -- emily: this week, emmanuel macron hosted the one world summit in paris. california governor jerry brown was among the attendees. we caught up with him and asked about california's role in combating global warming. take a listen. gov. brown: we're not going to convert donald trump or mitch mcconnell, the koch brothers or mr. ryan. they are in a cabal of denial. destructive of science, pulling back on research, trying to prevent california and other places that want to go on a renewable pathway. they want to resurrect cold, which -- coal, which is dying.

that is true. complications such as this does mobilize commitment. it does not exist before they come here. there are real financial statements that are going to be reflected, real commitment to dollars. i heard this morning from west africa, for indonesia, and for other countries. so these are real things. we are doing stuff. we are converting people. but we have to do it one company, one state, one nation at a time. so yes, this is an perfect. yes, there are a lot of people talking, and what have you, but damn it, the world is going on the wrong direction. it is going to hell, not to heaven. we have to wake people up. because the cynical complacency of the powerful of skewers -- obscures the truth is no reason

why people such as the -- as the leader of the netherlands, the president of france from so many other , countries, the vice mayor of china, there are a lot of people and there are more all the time. it is a real battle. i am going to do everything i can while i am in a position of power and responsibility to move the world toward a future that is sustainable. it will not be the destructive path that the cynics and those who do not understand climate science are stupidly moving the world toward. so yes, we are making progress. is it enough? no. is the world on the right track yet? no. but we are taking steps, and next september in san francisco we will have a similar conference and we will do it as long as we can, and eventually i believe we are going to win. people on the side of truth, sustainability, and the science

as we now all understand it. >> governor, i have to you about edwin lee. we just received word a few hours ago that edwin lee, the mayor of san francisco, passed away in an untimely way. i do not know any of the details. but give us your thoughts about edwin lee. gov. brown: ed lee was a good , really good guy. i knew him. i did not know him for a long time. but he was really a politician i think who spoke the language of the people. he was down to earth. he was genuine and had integrity. he was working hard in a very difficult city that is divided on many different lines. he will be missed. he was a good guy. he represented california and the city. untimely, you know? these things happen. we never know the time nor the hour when our time comes up. i would just say we are going to miss ed lee quite a lot. emily: that was governor jerry brown of california. as david and the governor were

discussing, san francisco mayor ed lee has died. he had a close relationship working with tech in the city , working to lower startups and keep major tech firms in san francisco, involving taxes and housing. he also trumpeted san francisco as a sanctuary city for undocumented immigrants and opposed president trump's executive order aimed at stripping such cities of federal funding. mayor lee was 65 years old and was a guest on our show several times. he will be missed. ♪

♪ emily: facebook is changing its tax structure. the social network will start to pay taxes in countries where sales are made rather than funneling everything through its irish subsidiary. facebook has come under pressure from the u.s. and europe for its tax practices, specifically routing u.k.-based sales through island and here in the states is locked in a battle with the internal revenue service that

than $5 it more billion, plus penalties related to the irish operation. >> these companies exist on the internet, so they have been able to be creative about where they decide to book that revenue. most of the self-service revenue from advertising will be routed through ireland, beyond that it is a big win for individual countries, for italy, germany, france, places that will collect taxes from facebook. give us some of the numbers. the actual tax rates -- and one case, they paid $6,000 in taxes. it is infuriating. >> and they are not alone in this. you have facebook, google, apple trying the best they can to manage their tax issues. of course, there is talk of repatriation of taxes for the united states will get harder

for them. in terms of numbers, this move does not mean that facebook's overall taxes will go up. emily: why not? >> it could be the same rate for them. it is just going to be very complicated to implement. the ft report today that broke the news, they said it might not actually be fully operational until the end of 2019. this change is a long ways away. so -- so this change is a long ways away. facebook is letting us know now. emily: what do you think of the timing of this? obviously, facebook is under pressure for fake news. many other things as well in this moment in time. >> this is a critical moment for the company where they have to make sure they are on the good side of the government's they -- governments they are working with. in some jurisdictions there are elections where they come under pressure for the way they use their platform to spread information. they are told to tackle isis accounts in europe. the company is working with governments and regulators on

those issues, and also these. also, they are not going to be to use the same tax rate in ireland for much longer. emily: you have an excellent story about fake news, where it gets propagated, and where someone has created this partisan and inflammatory news. you talk about how facebook is fighting on that front. meanwhile, selina wang is here to talk about an interesting piece in buzzfeed about how steve bannon and breitbart tried to exploit and manipulate the weaknesses in twitter's policies. all of this does somewhat tied together. selena, what was the gist of this article and how did bannon and breitbart manipulate twitter? >> the crux of that story that were bannon and breitbart were toing retribution twitter. it seemed like the platform was silencing their voices. so bannon went on this hunt for a legal editorial wave to damage

devalues reputation and them, they wanted to sue them and get short-sellers galvanized about this company. this pinpoint shows that philosophical conundrum since twitter's conception, how do they maintain this open platform without letting this run rampant on the site? emily: to a certain extent, they succeeded. >> no matter what they do there will be people who have backlash against them. from the very beginning, they wanted to be the free speech wing of the free speech party. they don't want to be the arbiter of what is appropriate information, and neither does facebook. that puts them in murky territory. they want to be an open town hall, so people can say what they want to say and they are hands-off. emily: in a way that has been the bane of their existence. basically i profiled saw this call to action, that facebook was neutral, a would -- they would allow content that

was viral. how do you make the best viral content? well, it is outrageous, it is something that will spark a ,otion, it is part -- emotion it is partisan. he was building a website that went further than fox news and terms of conservative leanings and often veered into fake news. from what we were talking about with twitter, facebook had to make the same decisions. how much content do we limit? what ways do we limit it? do we absolutely ban it? do we remove ranking in the newsfeed algorithm, which is similar to the twitter verification check. these past measures companies have done. this year, his popular conservative website does get crushed by facebook's news efforts in their change of the algorithm ranking. emily: it is the same thing but it will not be viral? is that what you are saying? >> exactly.

emily: it will be allowed on facebook? >> it still will be allowed. the thing with facebook, they are trying to dampen this stuff from going viral. but they do not want to be an arbiter of truth. they do not want to explicitly say, this cannot go on our platform. that brings up free speech concerns. even though facebook and twitter are not governmental bodies, they understand their power over global conversation. they do not want to be seen as censoring anyone or appearing biased. emily: which brings us to the controversy we talk about again and again with the president being on twitter and using it to -- what many people believe -- in flame, harass, and people have questioned whether twitter should allow him on the platform at all? >> they have spoken to a member of their own trust and safety council, who thinks trump -- users think the cyber bullying, if it were a regular user, twitter would kick them off.

however, twitter tries to weigh the newsworthiness of tweets of the user and looks at that against the disparagement and the content of the tweets. in the case of trump, we have heard from the executive chairman that they like that trump is using their platform. they like that global leaders are turning to twitter for their first mode of communication. i mean, it is good for their new , engagement, and keeping them in overall awareness for their brand and in the zeitgeist. they're willing to put that over the concerns of users that trump is not a healthy addition to twitter. emily: meantime, really fascinating comments from a former facebook executive, have venture capitalist we interviewed many times on this show, speaking at a conference last month. he said, i feel tremendous guilt. it literally is at a point now where we have created tools that are ripping apart the social fabric of how society works. he never said facebook by name, but many people think he is talking about facebook. facebook has now, out and really hit back on his comments.

a very unusual move, the talk about a specific person's comments there. what do you make of this situation? >> the companies usually stay silent in these circumstances. what he said must have really angered someone at the top. he is basically using this moment to cement how he wants people to think about him and his contributions. he was big on the facebook growth team back in the day. this is a moment for him to come out and speak, and within facebook they are probably worried he is using it a little opportunistically. emily: now for something out of this world. astronauts on the space station normally have to wait for movies to come out in theaters on earth. but they are getting one notable exception. disney has arranged a special "star wars: the last jedi" at the same time it

appears in theaters. that does it for this version of the best of "bloomberg technology." you can tune in each day. 5:00 p.m. in new york, 2:00 p.m. in san francisco. and remember, all episodes of "bloomberg technology" are livestreaming on twitter. check us out. that is all for now. this is bloomberg. ♪

scarlett: coming up on "bloomberg best," the stories that shaped the week in business around the world. bitcoin makes its debut on wall street. an electoral upset could make a big impact in washington. >> this is a thin republican majority in the senate. scarlett: congress plows ahead on tax overhaul. two media giants create a blockbuster deal. >> we are creating a great global opportunity for consumers. scarlett: central banks gather for their final meeting of 2017. drama is the outlook. just looks like they bought onto the idea that there will be fiscal stimulus. scarlet: speaking