10-year treasury note because we want to bet an idea the way the day went. [closing bell ringing] it started looking bad but then went back up again. if you're betting rates to go higher that is good news but not for most people. >> 2.73 on the 10-year now. david: there is always a trade to be made either on the upside or the downside. when rates go up it is usually bad news. today it certainly was all indices. liz: there we go, red on the screen. shortly 11:00 a.m. you had dennis lockhart of the atlanta fed said we'll tighten, not taper, tighten rates, second half of 2015. we were up more than 90 points earlier this morning. as you see we've done the next swing here. lost all of it. tried to recover. couldn't get it back. david: basically when the notes came out from the fed expressing their conviction they will continue with the tapering come hello or high water. time for the front page headlines. the federal reserve just out with its minutes for its january meeting.

they show that fed officials starting to debate tooraise interest rates. a few of those officials arguing that the fed might need to be sooner than expect the but not it is steady as she goes on taper. liz: lockhart was joined by bullard that the u.s. economy is facing its best prospects since the financial crisis. in a interview with "wall street journal" that it will likely have the fed reduce its monthly purchases. david: housing starts lower than forecasted last month, dropping 16% because of the freezing weather. this was the biggest decline in three years. liz: labor department says there was little inflation. the seasonally adjusted producer price index rising.of a percent in january. david: spirit airlines stock gaining altitude after an upbeat earnings report. the budget airlines fourth quarter profit beating estimates helped by more fee revenue and wider margins. liz: shares of navigation

equipment company garvin jumped after the fourth quarter profit jumped 27%. the ceo exclusively on "money" with melissa today sounding a very optimistic tone. "after the bell" starts right now. david: let's get into it as we see the market trading to the downside as we close here. todd horowitz is average joe options.com author and founder. he is expecting a 10 to 15% correct in the market. had part of in january. it has come back. we'll ask him about that. randy warren, chief investment officer is here as well. am i hearing right? do we have tesla numbers? we have tesla numbers. jo ling kept with them. go ahead, jo. >> coming out at 33 cents, nice beat on 21 cents the street was looking for. revenue is coming in at $761 million. that is also a pretty good beat of the 86 -- 686.25 million the

street was looking for. trading up after-hours 4%, guys. david: there are several things we're looking at. it is trading up. we're looking for big trades up or down depending how the details the earnings look. so far so good. we'll check out the 25% gross margin that elon musk promised us. liz, you've been looking into the numbers? liz: yes, i have. tesla saying putting a point on calendar for the new model x. they will have a production design model on the road by end of this year. they expect to have delivers of to customers by spring of 2015. this is very good news for anybody waiting on the model x. they wanted to see that point on the calendar. you see what is going on with the numbers the stock is jumping the ask is 200. the bid a few minutes ago was up there a few minutes ago. moderating a bit. they are looking at something called the gigafactory. i think this may have something

to do with making their own batteries. david: they were talking about deliveries to china by spring. that of course could be a big thing if in fact wealthier people in china are buying that car. they don't need much in order to get a lot. we're waiting on details about how many cars they are actually selling or they actually sold in the fourth quarter and that issue about the 25% gross margin which essentially elon musk promised us during the last one. liz? liz: let's bring in mark sebastian on this. mark, you're down there in chicago on the cme pits. i do have to quickly mention they're putting a number on q1 production. more than 7,000 vehicles. the expected number is 7,000 -- 7,400. boy are they driving fast here. >> yeah, when i look at tesla i see figures of apple 2011. i think valuation is really rich. it is what, 40% of the value of gm and ford and puts out 7,000

cars in a quarter. how long does it take ford and gm to put out 7,000 cars? it is also a big regulatory concern long term. will they keep the environmental credits that really produce all the profit and loss on those cars? when i look at tesla i get really nervous especially at these valuations. liz: you can't compare it to general motors, though, mark. i know you know this they are totally different companies. one is certainly a high-end luxury vehicle. they're trying to make it more mainstream and people come on and try to compare it to general motors. will not happen. one has been in business fors you know, 10 years. the other has been in business for 100. david: that is the question though. as they promise into the future, todd, the question whether they can produce a mass production car like gm or like ford does. now they have promised that the generation 3 platform which will allow for a 35,000-dollar car, that is much more mainstream that would require this infrastructure of charging stations which they have been

working on. do you think based on what they have planned for that general interest car, that $35,000 car, that the stock value is worth it at this price? it is up 450% over the past 12 months? >> i think at this level it may be a little bit pricey. i'm in a little bit of agreement with mark here. however if they can deliver everything they say they can deliver they do have great potential. they have great ideas but they have to come back with the public. they have to come back with a better-priced automobile more people can participate in and they have to ramp up production. that is the real concern here, when the california tax credits do run out how will they ramp up production and delivery? goes to the same thing. how will they grow and deliver all these cars? liz: they're doing it. q4 model s delivery numbers, 6892 and they're coming up with a total number what they expect to deliver for this is of course the one that's out there that is very popular right now. they expect a 55% increase over

2013 with an expectation to deliver, david, 35,000 model s vehicles. david: they have 6892. the estimate was for 6900. so they're right in line basically with those estimates. they have that model x crossover suv coming out either end of this year or the beginning of 2015. but again one of the things i'm wondering about, i will go to randy for this, ex carbon credits. a lot of income they receive or revenue stream they have been receiving over past couple years are from california and carbon, essentially what apts to carbon credits they call them. they call them exhaustion credit but that is the key. can they make it without government assistance, what do you think? >> eventually they will be able to make it without government assistance. we're talking about here to ram up production capability and drive down prices and make profits on what they're making instead of credits they're

getting for being a electronic car. liz: as we move on, we'll talk much more about this with a top tesla analyst. right now the bid for the stock, $206. the last trade, in the regular session, 193 and change. randy, let's continue with this discussion and find out how you see the markets at moment. we had interesting trade today. could possibly throw it out things dennis lockhart of the atlanta fed said. looking ahead we got weak housing data. what do you seize upon this moment, optimism or pessimism about stocks? >> basically optimistic. i think what you have to think about is, is the united states going to start to lift off in terms of its economic activity? as the united states starts to speed up, the rest of the world will then follow along and speed up as well. so you looking really for the united states to speed up. so therefore you want to probably be invested in the united states for the most part, stay away from your emerging markets until the taper is over with. that sort of thing. but pretty optimistic on 2014.

it is not going to be a year like last year where the market went straight up and you didn't have pullbacks. david: todd, we had a pullback in january, about 5 or 6%. we've had a comeback since the pullback. where do we go from here? >> i think we go lower. the top level, we reached almost the 1850 level on s&p. i think market continues lower. david: i want to press here. you say we go lower, from the january low or lower from right here. >> i think we go lower from here and january low. i think before the year out we trade 1550 and 1560 in the s&p. david: wow. liz: mark sebastian, do you see it that way? are you that expectation of what might happen as far as a correction is concerned? >> i'm not sure i am as aggressive as todd. i want to talk about what happened in this last rally. the last time we got up to the 1840 level we saw the vix trade down 12 1/2. which is the lowest level since,

one of the lowest levels since 2007. on the secondary rally, this snapback rally which was strong and fast, the vix this morning wiih us, basically right on top of the all-time highs in the s&ps, trading 14 1/2. from there we saw 12 handles. the vix is now near 16 points. that shows you how tumultuous this market is right now and how uncertain of itself the market is. in the short term -- david: randy, with all of this volatility that you have to admit we've seen over the past mmnth 1/2 or so, would you buy into the next dip, or would you buy in now? are you going to wait until we have another dip, or are you going to buy in right now? >> i think you can start to put money to work here. i think market is going to have its pullbacks this year but you want to buy those pullbacks. you don't want to be panicking and selling pullbacks specifically. david: where specifically would you buy in right here, randy? >> specifically you want to look at your biotech stocks.

you want to look at your airlines and multimedia stocks. this has been a three headed monster that has been killing in the market for the past year or more and that is actually an pretty encouraging bullish signs, that trends that to move are actually able to continue to move up as time marchs on. in the recession times during 2008, 9 and 10, we were trendless. there was no trend you could jump on and say, oh, wow, these stocks are doing really well, these companies are growing earnings and these companies are growing revenue. it just wasn't happening. now you're starting to see various segments of the market picking up steam and starting to grow and trend are lasting longer. you can observe the trend. you can see the trend. you can jump on board the trend and make money. david: i wish you could see how todd is ready to jump on you. he is still a bear in this market. terrific discussion, guys, thank you very much. liz: thank you, everybody, mark sebastian weill come back to you in a few minutes when the s&p futures close.

liz: look at this bid now, $215 for tesla. an earnings beat and so much more for tesla. just moments ago the numbers came out beat on both top and bottom line. again these are adjusted numbers with you the numbers, are they enough to keep the stock's massive rally in full gear or will profit-taking prevail tomorrow? how should you trade tesla. david: huge story. a lot more coming up in the next block. netflix saying streaming speeds on its service have slowed dramatically. have you tried to watch the show, "house of cards" and seen that sort of clock go around and around waiting for action to happen? there is a reason for that. there is a big fight between the providers of content and those who stream the content. we're going to get into that with a former fcc commissioner coming right up. liz: tell us what you think. could the squeeze being put on netflix by the providers hurt the stock? which stock? netflix or the bad guys in this game? as some perceive it to be.

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tell your doctor if you have been to a region where certain fgal infections are common, and if you have had tb, hepatitis b oc, or are prone to infections. tell your doctor about all the medicines you take, and if you are pregnant, or plan to be. taken twice daily, xeljanz can reduce the joint pain and swelling of moderate to severe ra, even without methotrete. ask if xeljanz is right for you. liz: the s&p futures closing. let's head back to mark sebastian in the pits of the cme. hi, mark. >> hi, yeah, looks like we closed mostly unchanged but one key thing to watch, with the vix pricing of 1% daily move i think we're heading for a lower dip.

this market is better trained than my golden retriever to buy 100 day moving average. if you look toward a entry point, look toward the 100 day moving average to get in. david: thanks very much, mark. tesla just reporting earnings moments ago. the stock is moving big-time after-hours. liz: let's head back to nicole petallides watching it. >> exciting tesla story, liz and dave. it continues to be exciting because here in after-hours we're seeing tesla's stock moving to the highest levels ever if this is to come to fruition in tomorrow's trading. it closed at 193 and change. the bid-ask range is 218, $219. the highest tesla traded was $206. what do we see with the numbers? let's talk about the latest quarter. earnings per share beat, 33 cents. that was a beat of 26 cents analyst were expecting. revenue came in 761 million versus 686 that analysts had been expecting.

they plan to deliver over 35,000 model ss in 2014. their production is up to 600 cars a week. they continue to do well. they also are watching europe and asia growing which at this point now is growing together almost two times the sales of north america going forward. and they're going to get that model x on the road by the end of the year and hoping that by 2015 that will be in full force. they are working on battery innovations because that was one of the issues that the public relations department had to deal with and lowering costs of those batteries. so as a result, this stock which is up 418% in one year looks like it will have another up arrow tomorrow. liz: have to watch tomorrow, watch fox business. we have breaking news out of kiev in the ukraine. there apfainterly is a truce between the government and the opposition. start of talks has begun but this is a live picture. looks like anything but a truce. but the police in the past hour 1/2 have pulled back and

stopped trying to advance upon the protesters. although i believe we heard something like a flash bang grin made or -- david: they have been doing that all day long. we heard a lot of banging an explosions. most of that is fireworks we've seen going off, being used by demonstrators. so this, for the most part we can't guaranty that right now but there have been deaths. for the most part those are firecrackers, not gunfire. liz: victorrian cohesive, the -- viktor yanukovych has started talks. 25 people have been killed including 10 police officers. david: these are live shots from the ukraine. as the situation develops we'll bring you breaking news. let's get back to tesla. we want to bring in still nicholas analyst to break doesn't numbers. jamie, we had a huge after-hours jump in the stock. will that hold tomorrow? >> thanks for having me and good afternoon.

i think there is some likelihood it trades up tomorrow, interesting enough. this is the week of a lot of positive sentiment around the name that was stirred up by speculation around a take-out from apple. if you look at numbers, i think what people focus on is certainly 28% gross margin target. 35,000 units expected at a thousand per week unit clip by end of this year. higher than the 800 per week expectation that is elon laid out but not enough, i don't think of a delta in terms of the fundamental story to translate to 200 plus pe valuation. liz: well, that is sort of been the amazon case here. >> sure. liz: where you can't really fathom it at the moment but regardless, people feel very optimistic and supportive of3 this company regardless. the leadership, elon musk, has been very stable when it comes to doing things he said he would do for the fourth quarter. they sold 6,000 or delivered 6892 model ss. that of course is pretty much

even, david, right, with what was expected? david: it is. liz: you start to see q1 production will ramp up. he talked about the future what could be a gigaplant of sorts where they would start producing their own batteries, which starts to make you look like a real member of this game versus just abu teak type of a vehicle. >> no, look i agree and i think i would add to that the idea that they can somehow generate a significant market share within the next four or five-year time frame at a sub50,000 price point vehicle with as of yet unreleased model e or gen iii vehicle. there is lot of expectation built into the numbers. from a fundamental perspective, keep in mind, they're managing labor. they're managing costs with respect to a reservation system as opposed to a managing to, a market cycle. it's a very different phenomenon very different from a gross margin perspective.

i don't they have been tested from that standpoint. there are quite a few obstacles ahead not least of which is ramping competition as well. a lot of supporters are dismissive of competition as of late. nevertheless, exceeded expectations here on the quarter. i don't think by as much as this after-market trading would warrant. david: again the after-market trade, we have to put that back on the board because it is trading by the second. after-market we see more than 10% increase. the bid after-hours is $222. it traded below $200. this is more than 10% growth. question of carbon credits, a lot of their progress has been made ex carbon credits, without factoring in the money they're getting from california and other carbon credits. has tesla's affair to say has it outgrown the government training wheels, jamie. >> i think that's fair. as they expected, sort of intimated, no revenue from zero emissions vehicle credits in the fourth quarter. we're still working through the details here. i'm sure there are some other

regulatory credits, you know, still within the story, but the zero emission vehicle ones are ones everyone is focused on better part of last nine months. so that's gone. i would agree with that more or less. david: good. jamie, you can't beat those numbers, wow. the question whether they will remain tomorrow. we'll wait and see. liz: that is an excellent question. we'll be here to watch it every step of the way. meantime powerful winter storms have sent quite the chill through the housing market but what about shopping malls and companies that make their money off putting them together in a real estate investment trust? it's a fox business exclusive with exactly that, the ceo of a reit who says bad weather is not the biggest threat to his small business. it is something else. he will talk about coming up. david: we're looking at live shots now from ukraine, just moments ago. we heard ukraine's leader announced a truce. it was on his website. we haven't heard the full story from the opposition. they are complaining that russia's getting far too involved in the internal affairs

of the ukraine. he is complaining that they are trying to blackmail his government. so we will see if this truce pans out. as you can see there is still molotov cocktails being thrown back and forth from the demonstrators. there are still bullets flying. there are fireworks. a whole lot is going on in ukraine. we have it all covered here on fbn. ♪

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the x1 entertainment operating system, only from xfinity. liz: as we told you breaking news out of the ukraine moments ago. word of a truce. the latest clashes in the capital kiev left 25 dead, hundreds injured since the protests started in november the russian etf, we lo

president met with various groups including important @pposition groups. they came to some agreement how to resolve the outstanding issues that led to all the bloodshed and there will be a truce. now we don't have details, when that truce will take place. if in fact it will take hold. or anything more at this point but this news did come from the

president's website and it has been picked up by ukrainian prof a today and other -- pravda and other publications. there is all sorts of activity beyond clashes on independence square in kiev. we have diplomats from europe heading right now to kiev to try to meet with both side and help to broker some sort of a deal. the e.u. calling an emergency summit for tomorrow, to talk about possibly imposing sanctions, targeted sanctions on people considered to be responsible within the ukrainian regime for all the bloodshed. russia is announcing it will cut off some of the aid it has promised to ukraine. all of this because ukraine has been caught in a tug-of-war between russia and the west, but, lots of people are saying that it really shouldn't have to choose between east and west. >> not an existential choice like you choose good or you choose evil. it is not black and white and it

is extremely complex. >> now david and liz, obviously 26 people dead, 100 people injured and a vast amount of destruction done to the city of kiev. it is hard to imagine how the reconciliation will all work. also president yanukovych is not one to quit. he is not indicating that he wants to go away and that's what a lot of these protesters are demanding. they're also complain about corruption and cronyism. we don't know if there is in fact a magic solution but we will certainly be very keen to see maybe there could be one and we'll be following this very closely as you will be. back to you, david and liz. liz: amy kellogg live from moscow. of course amy will break in anytime she gets more news. but the fact is, david, the pictures look alarming as the ukrainian government aligned itself initially with russia much. and the people did not like that. they felt trade should be open, exactly what the sound bite just

said, why choose between one or the other. why not have open trade? david: going back to the old soviet union where russia calls the shots, not an independent ukraine. on line continues to drive many to brick-and-mortar retailers leading many to question the future of shopping centers. we'll talk with ceo of a reit which invests heavily in shopping malls and how his firm is evolving with the consumer. liz: ever since tim cook took the helm of apple the investors are wondering when the tech giant's next generation of new innovation or hot products will emerge. coming up we'll look at the newest patent filed by apple. a window, secretive opening perhaps what they might have next. here's a hint. it involves headphones?

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move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's onlyne way for yourusiness to go. up. find out if your business can qualify at start-upny.com david: rumors continue to swirl about what apple's next big product is going to be atv a smart watch, maybe a partnership with tesla. well according to documents the company patented designings for ear phones, headphones, capable of monitoring the wearer's vital signs through movements and censors. the patent describes headphones fitted with sensors for monitoring your temperature, perspiration and heart rate. it hints at possibility of using motion detectors to change music tracks. so with wiggle of a finger or pausing and playing music through the headphones. that is their next big thing.

liz: can you imagine the fear this has struck in beats by dr. dre? who knows. new housing starts plunged 16% in january as frigid temperatures and winter storms battered the recovering housing market. we have somebody who says there is one segment of real estate, the commercial sector is picking up momentum in 2014. he is focusing on morphing malls to mirror consumer trends. with very pennsylvania real estate investment trust ceo, ticker symbol, pei. good to see you, joe, going back to weather and how it hurt housing i imagine people would love to be inside of a nice warm mall that is covered where they go to many different stores. have you seen any reverse bump there for you guys? >> well we have certainly seen the fact that if someone can't get out of the house they are going to shop on the internet. but having said that, from our perspective, retail needs to be more a mall. needs to be more than just a

place to shop. it needs to be experiencal. we think about it as the important component of a mall experience has to be dining, entertainment, play areas, all of the things, wi-fi and all the things thaa really make it more than simply a shopping experience. liz: well that is what you started to do. i was looking, i would say of your 30.3 million square feet you have of all different malls, that is a real focus where you morph the mall to fit with what consumers now demand. doesn't that take capital expenditure? >> well it does but the returns are there. we had a record year. we had our best noi return, 2.6% than we've had in a decade. our highest occupancy, our highest liquidity and our lowest leverage. so it was a good year for mauls. we certainly, as you talk about the internet, our view is it is

parts of the omni channel approach that retailers have, and so our focus is to embrace it, not to, not to fight it. liz: well in a way seems like that's what you're doing with what you mentioned at the top of this interview, that people would hunger down and stay inside their homes and shop via the internet. we saw some of that play out certainly during the holiday season where internet traffic was so high and some brick-and-mortar stores had some real trouble fighting that wave. not fight it but join it. as we see, holiday shopping retail in crisis down 2010. you came up with this app, i have it here on the ipad tablet where you help people along the way. i threw in nike shocks. you search the mall you want to go to. we picked hudson mall which is in new york. it comes up with every exact store what sizes they have and the price. that way you just go there.

this has got to be good. how many people signed up for this. >> well we had 600,000 hits since we introduced it in september. in essence what you've just described is the fact that we have replicated the internet shopping experience in a mall environment. we've given, we've given the the millen a way to shop as if they were on the internet. we then introduced restaurants to that environment and millenials certainly like to dine out. so we've given them the best of both worlds. dining out, having a social experience, and replicating the convenience of the internet. liz: you've got a pretty decent return, a yield of about 4.2%. reits tend to move inversely how interest rates move. as you know today, i'm sure you saw the news, that at least one federal reserve president, it was dennis lockhart of the atlanta fed, came out and said they probably tighten rates midway through 2015. in fact his exact quote was, in

my reserve bank's most recent official forecast we predicted liftoff of the policy rate. this is beyond tapering. this is tightening in the second half of 2015. i reason may comfortable with that forecast. are you worried about that? you saw what it did to the markets today but are you look locking in cheap money at attractive terms? what are you doing in advance of that? >> we have very little floating rate debt. most of our debt is locked in with hedges so we have very little exposure to floating rate debt. liz: okay. >> but i would also add that interest rates increasing are not the end of the world. we're not going on able to see them continue at this level forever. the thing that i'm pleased about, i still think there is pent-up demand in the consumer good. >> as we move forward we'll see that. it is going to stop snowing, contrary to popular opinion it is going to stop snowing. liz: good. >> 13 storms in the northeast. liz: i know.

and counting. joe, hang in there. it's great to talk to you. the stock is pretty much flat over the year but again you're paid to wait, 4.2% dividend. thank you so much. >> thank you. liz: joe cordano of pennsylvania trust with the very cool watch we got to see. david, over to you. david: i don't think it will stop snowing. i think it will go right through august. like it or hate it the marwan business is booming. next we'll talk to a ceo hoping to capitalize in a market that could top $3 billion this year. his customers include medical marijuana dispensers. season two of the hit netflix series "house of cards" but a battle royale over fees are putting the squeeze on the streaming video company. we'll tell you what it means for investors and consumers with a former fcc commissioner. meanwhile we're watching the very latest from ukraine. again, it appears as though there is a truce between the government and protesters.

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coach calls it logistics. he'sdependable.sser. a winning team has to have one. somebody you can count on. somebody like my dad. this is my dad. somebody like my mom. my gndfather. i'm very pround of him. her. them. [ male announcer ] how did ededward jones become one of the biggest financial services companies in the country? hey. yours? not anymore. come on in. [ male announcer ] by meeting you more tn halfwa it's how edward jos makesense of investing. david: the obama administration taken a big step toward clearing way for banks to do business with marijuana sellers. -@so who stands to benefit? what does this mean for the marijuana industry? joining us is the medbox ceo which sells automated dispensers that can be used for marijuana. so, are you, do your machines

only work for medical marijuana right now or can they be used for recreational use as well? >> good afternoon, david and liz. thanks for having me on. no, you're absolutely correct. we actually have two divisions of our company at medbox. we have pharma division and a medical marijuana division. our technollgy is the safest, most secure, most legally compliant way to store inventory control and dispense prescription medications and for herbs and medical marijuana for traditional pharma as well. david: i would imagine that the qualifications or the regulations concerning a dispenser for medical marijuana vary different from those, if they have even been conceived of yet for recreational use, right? >> we, correct. actually, and strangely enough the milestone, and the monumental decision that has just come down from the feds last week, regarding banking

policy is really the first step along the road of integration of this industry nto mainstream america. david: i imagine if you want to get one of those machines it is easy to swipe a credit card to do it and you can't do that without banking permission? >> no, not our particular technology. our technology is compliance tool. it sits behind the counter and operated by despens is ary staff. david: why would the treasury decision on banking be the grease for your wheels? >> well, there's a lot of different reasons. it is agrees for our wheels because medbox is essentially primed, we are n the optimum position as the industry leader right now to basically be able to grow with this billion dollar industry as you said in the coming years. 3 billion this yeer. 18 billion in a few years reported by rp research. we are, essentially ready to

vertically integrate this industry, roll up this industry and actually expand our business model so that we become one of the few polished gems in this industry as time moves forward. david: how do you get around the fact it is still a federal crime to sell marijuana? >> that is exactly correct. our company currently does not draw any revenues from the sale or transfer of the herb. in fact no public company can do that. but that is exactly the point what i said. there is many ancillary businesses like myselves, who have the ability, to also have relationships, not only in the ancillary services but in directly involved with the dispensaries. we, with these relationships, we can put in place synergisticc3 opportunities so that wwen the feds, you know, decide to essentially wave the green flag and reconcile the difference between the state and federal laws, we'll be able to essentially have the opportunity to essentially jump all over it.

david: so it's a setup more than anything else? you're setting up for the time when it is no longer a federal crime? >> that s correct. david: finally this is something bother as lot of parents out there. how do you make these things kid-proof? which things? david: dispensers themselves? >> like i said, ours is a compliance tool. people, consumers don't even get to our technology. in fact our technology is so strong, it stops even fraud from occurring because we take bio mitt tricks from fingerprints and swiping i.d. cards. there are many different layers of fraud protection. david: bruce, thank you very much for coming on, bruce. let us know what happens, all right. >> will do. david: i appreciate it. liz? liz: "clash of the titans." netflix clashes with broadband providers and the feud means many customers are seeing so-called spinning wheel of death on their screens. you hate that, right? who is to blame? how is it going to be fixed? could it be "back to the future" of lovers of the old concord

passenger jet? plans for a new supersonic jet to cut travel time in half and give passengers a panoramic view as it rockets through the sky. we'll have details on that next. ♪ [ male announcer ] legalzoom has helped start over 1 million businesses.

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liz: if you are one of those people looking to bing watch "house of cards" this weekend, you said you were going to. david: i did. liz: instead you may have bottom that dreaded word, buffering. you're not alone. david: the company says average download speeds fell by 14% particularly on verizon network. slowdown is because of a feud how much broadband providers will carry without netflix paying extra fees. the fcc will craft new rules to prevent companies like netflix from being charged more. with us, robert mcdowell, former fcc commissioner. good to see you again. >> thank you very much. david: is there any way we can get ppoof or the fcc can get proof that the broadband providers are specifically slowing up netflix's product? >> well, proof would be helpful here because actually, just last week, netflix said that internet seevice providers like verizon were not slowing speeds. so they need to make up their

minds. you know, there has been no evidence thus far of any systemic failure here. folks are seeing buffering apthings like because there is normal network con best shun. netflix accounts for a third of all internet traffic sometimes. there is amazon prime and others like youtube. so those do clog pipes and people will have to look maybe buying fatter pipes. i had to do that for my three kids a couple weeks ago by faster broadband speeds. there are more bandwidth intensive apps like video that and that will require higher broadband speeds for consumers. liz: robert, we put up logos certain broadband providers somewhat accused, verizon fios, at&t, comcast, accused particularly, purposely slowing down netflix traffic because there is showdown a plumbing dispute. we just had the ceo of coagain communications which -- cogent

communications which takes 21% of all broadband internet traffic throughout the united states in the last hour. he used the word cartel to me in a commercial break. think these guys are banding together in a cartel. here is what else he said about this. then you can comment. >> sure. >> the dispute is broader than netflix and unfortunately, there is collateral damage that many users, corporate users even, who use the internet are caught in this traffic jam. liz: he says it is bigger. he says there is a little bit of nefarious work here. >> if there is, there are plenty of laws already on the books, absent any new net neutrality rules that would cureethe problem. there are antitrust laws. there are consumer protection laws. section five of the federal trade commission act. lawyers would have field day with tortious interference. could sue network providers for billions of dollars on behalf of

consumers. there are already a lot of arrows in consumers quivers as well as government's quiver to go against internet service providers if this indeed were happening. the fcc and government has never done a market study of the broadband market that would flesh out some allegations coming by the way at pretty opportune time in the wake of court ruling last month and right as fcc announces new rules. david: you put your finger on question, very interesting one. the current fcc chairman, tom wheeler, seems to be ignoring a court order that would go against netflix. is he doing that? >> well, so he is finding a hole in the fence around the fcc's jurisdiction. so the court last month rebuilt part of that fence. then carved a hole in the fence saying, fcc might have some authority here, which by the way could give it the authority to regulate netflix and google and amazon and others too. they're very concerned about that. not just internet service providers. but it can't, the court explicitly said it can't

regulate any companies like it did phone companies in terms of rates, terms and conditions. david: is there any way verizon could say that, hey, the fcc is going against what the court ordered quickly? >> absolutely they could appeal in court after new order bit fcc, absolutely. david: robert mcdowell, thanks. >> thanks for having me. david: let's go "off the desk." imagine a private jet to take you from new york to london in just three hours, just like the concord did. we had one of those. that is the plan for a new '80 million dollar jet from boston-based firm spike aerospace. >> i like the name. the private jet has cabin without any actual windows. instead the walls covered with thin display screen that plays movies, pictures or live video stream from outside the plane. david: engineers have spent two years designing the luxury aircraft and say the 18-seater jet will be up in the air by late 2018. we don't know exactly how expensive it will be. liz: i was going to say, how much? david: the old concord was about

10% premium over first class. liz: but time is money. david: time is money and those things are fun. you can see the curvature of the earth which is fun. liz: never got to. but "the willis report" is next. you can see that coming right up. [ male announcer ] whether it takes 200,000 parts,

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cme group: w the world advances. gerri: hello, everybody i'm gerri willis. right now on "the willis report", netflix and your cable company about to start a huge fight and guess who will get stuck with the bill? >> the butcher begins. gerri: also, better not miss a payment on your credit card. print of one bank's contract that is causing quite a stir. >> what's in your wallet? gerri: washington can't control its own spending but wants us to save more. you won't believe how they propose to do that. we're watching out for you on "the willis report."