Sandy hook. Flags state wide flu at half staff today. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti, this is bloomberg and Bloomberg Technology is next. Im emily chang and this is Bloomberg Technology. The fcc officially hits reset on the internet. What that means for the internet of the future. Plus, disneys megadeal for a massive chunk of talks. What the worlds biggest Entertainment Company gets for its 52 billion. Orville revenue rises. The ongoing competition with cloud later amazon. First to our lead. Net neutrality no more. The fcc voted to repeal the obama era protections. The republican Led Commission voted 32 to repeal. It comes amid defense amid intense protests. The fcc chair heralded the return to what he called a free speech market approach. He said it was time for us to restore internet freedom. Joining me now, one of the people who earlier voted to repeal Net Neutrality, brandon carr. He was nominated by president trump. You say today was a great day. Many people to say today was an awful day. What dont they understand . Thank you so much for the question and for having me on. It is a great day for consumers, innovation, and freedom. 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 in 2015 at the 20 years before that. This is not moving toward some mad max version of the internet. Isps will not have complete consumers will continue to benefit from that without the harms we are seeing from title ii. Organizationsr of say they intend to suit the fcc. Sue oness says they will the basis of willful rejection of evidence, and absolute disregard of public input. New York Attorney general also intending to sue. Saying, it is not just an attack on the internet but it is an attack on all new yorkers and every americans voice on government. What is your reaction to those kinds of comments . Anytime the fcc takes an action on the space of internet regulation, companies sue over the decisions we make. The reality is the Supreme Court in 2005 took up the fccs authority to classify Broadband Internet access as a title i service. The fcc does have the authority. That is the only action the Supreme Court has ever blessed. Extremely sound legal footing. Im confident where we go from here. Emily we also spoke with former fcc chair tom wheeler. Take a listen to what he told us. 1934r the First Time Since , with this decision, the fcc is washing its hands, walking away from that congressionally mandated responsibility. They are only doing it for the most Important Network that will define the rest of the 21st century here it it is an inconceivable kind of action. This what do you make of accusation that the fcc is absolving itself of responsibility, rather than taking responsibility . Not the case. Ply we are going back to the same regulatory remark that was in place in 2015. I think your viewers can remember the internet of 2015. It was not a referral. Those protections will be back in place. Powered tol be fully police isps, conduct with respect to consumers. Another key piece of that is Online Privacy protections, which consumers care deeply about. The ftc is the nations premier Consumer Protection agency. They have been prohibited in the last two years because of the fccs title ii decision. This is not going to be a situation where there are no rules in place. Emily comcast has said they will not invoke paid prioritization for what would happen in that case . What has happened here is a misperception of what title ii did. Right now, title ii does not blockingiders from websites, creating fast or slow lanes. There are reasons why that stuff is not taking place today. It is Market Forces regulating that conduct. Forcesur decision, those stay in place. There is positive law we are putting in place to. Thatll antitrust law. It prevents isps from entering agreements that unfairly block throttle or would create anticompetitive paid prioritization. There will be rules and legal standards out there that are going to be able to police any of misconduct that people are talking about. Emily what about the fake comments in the Public Comment section. Does that give you any pause . Written, comments were potentially by a robot, to counter the vast majority of comments that were against this repeal . It does not give me pause. Heres why. We have run an open and transparent process. The administrative procedure act is clear on how an agency like us runs our rulemaking. We have an open record. Anyone who wants to file a comment can file a comment. We got over 24 million filings in our preceding. I think that shows the passion issue. Ople have in this our decision is based on the substantial record evidence that we developed. Emily but the vast majority of this comment were against the repeal. There was a wide range of user express. We have to confront the threshold legal matter. Intend the internet to be in one or the other . When we look at the legal determination that we have to make as commissioners at the agency, it is clear to me that this is a title i information service. Emily when will we see lawmakers actually an act this into law . Our decision today goes into effect as soon as the omb and ther Government Agency rule transparency rule we adopted. It will take effect for laughter that. That is the timeline. Emily how do you see the internet five years from now being different . Already it seems like so much power is consolidated in the hands of a few very powerful companies, many of those companies were against this repeal. How does the internet look different to you in five years . Is a good question. Thats why this is such a great decision. Title ii is a monopoly style regulation. A lot of debate is about at t, comcast and the big isps. I think they have been negatively impacted. Talked to consumers, what they want is more competition. That is where title ii headsets and the wrong direction. There are thousands of smaller isps out there that either trying to provide service for the first time, or provide competition to some of the larger providers. Those are the ones hurt worst by this position. I look forward to, when we repeal this title ii, those providers will have a easier time competing. They will benefit as a result of increased competition. Emily fcc commissioner brendan carr. Show we will be speaking to reddit ceo who says the battle is not over. Orval and adobe reporting earnings after close today. Adobe also Beat Estimates in the fourth quarter, with revenue coming in at 2 billion. We will have more on the results later this hour. Coming up, the mouse eats the fox. Disney takes a big chunk of Rupert Murdochs empire. How the deal came about. Well tell you everything you need to know is bloomberg. Emily a mega media deal has been announced after weeks of speculation. Disney is snapping up a large chunk of fox. It is the biggest acquisition of disney to date. Iger in a leg. They explained how the deal came about. Rupert and i have known each other for a long time. Weve a lot of respect for one another. We occasionally get together and muse about the business. In a get together this summer, we were talking about the Disruptive Forces we were seeing. Thinking that there might be an opportunity for us to do something with him. I thought about it for a few weeks and called him thereafter. I suggested maybe we should get together and talk about it. And spend some time analyzing whether there was something to be done and what the Value Proposition might be for shareholders of both companies. Up and gotur sleeves into negotiation. Here we are today. What we are doing is creating a ray company but a great global opportunity. To consume and under circumstances that are innovative and compelling and much more userfriendly. Thats what the consumer uptodate demands. We have learned a little more about your future. Whats the future for James Murdoch . I have talked a lot about a potential role for him. He will be integral for planning the integration process. We will continue to talk about where there is a role for him at this company. We may good relationship. He has been very helpful in this process. A lot of people are thinking about a succession plan. Is that something you could see happening . I am now extended through 2021. The board of the company will have ample time to consider its options in terms of my succession and to reengage in a planning process for that. It is premature to speculate. Ultimately it would be a poor decision. Emily disney ceo bob iger, with bloombergs jonathan ferro. Here to discuss everything we need to know about the deal, we are joined by Chris Palmeri. Walk us through eicher said he didnt see this deal happening. Walk us through the nuts and bolts of the deal and what it means. The bulk of what we know of fox is most of its entertainment assets are going to disney. Channel,tudio, the fx the National Geographic channel, a lot of international assets. Ky of europe. , st foxs a massive chum of merging with disney. Emily what do you think of the idea that James Murdoch could be eithers suspects are. James murdoch could be bob igers successor. Surprise today was that nothing happened. Neither side will do it out. He iger, you heard him say expects them to have an advisory role in integrating the two companies. Nothing clear yet. So, bob saying now he is going to stick around for four more years. To say at this point that James Murdoch has any real clear path to cleat to ceo at disney. Emily this is the biggest acquisition ever. How does this fit in the context of their prior m a. Previously it was about content. About bringing all these wonderful characters, pixar, marble, lucasfilm. Is a much broader play. It is a doubling down on the film and tv business at this Pivotal Moment where things are changing so rapidly. A lot of exciting things out of disney from a technology standpoint. Igers catch of a multipronged strategy. In 2019. Channel and hulu, which they now have control of by 60 stake. It is the adult version of what they are trying to do. That is where fox comes into play with this programming. They are trying to create an online choice for everyone. Emily what do you think how do you think this will impact the bigger media and in entertainment industry. Netflix, you have to be nervous. Netflix is new losing the disney movies in 2019. Bob iger today suggested that a lot of the fox stuff they have a new movie deal with hbo. Everyonee seeing taking their programming inhouse and in disneys case, through their own distribution pipeline. We will see a similar reaction. That withready had its all access. Bloombergs Chris Palmeri there in hollywood. We will be digging into this deal and the streaming value the streaming battle a bit later. One of the most popular Cryptocurrency Exchanges has added a big name in tech to its board. Head of Facebook Messenger is joining the board of coin based. Davids knowledge of the mobile space will help guide us. It will bring opportunity to people all across the globe. An explosions seen of user growth in the last year as the value of coin source. Andng up, more on oracle adobes earnings. Next, this is bloomberg. Emily tech investor has resigned from the Venture Capital firm he invented. He was accused of Sexual Assault and harassment by multiple women. Saidstatement, the company we are deeply committed to our culture of integrity. We will continue to put these values into action over all of sherpa capitals activities. He relates his own statement saying i plan to focus now on the appropriate ongoing regal actions against those who are unjustly looks trading a Smear Campaign against me. He has denied all allegations. Oracle and adobe out after the bell. Metsted revenue that analyst estimates. To talk about all in more detail, we bring in cory johnson. We start with oracle where it is all about the cloud. Look fors the story all of technology is about the cloud. As oracle tries to make its move from the dominant seller of Enterprise Software in the database to a cloud seller, everyone is focused on their Cloud Business as they should be. The results from oracle cloud are fantastic. It was a very impressive quarter. I think you have to talk is down. Is down. Ock every quarter they are talking cloud, cloud, cloud. Investors expect to see lots of cloud and guiding up. Its not enough for that market that wants to see them beat and praise. How farets talk about along they have come. Now that they are at the cloud, what remains in terms of continuing to fight that battle and send off the competition. Think the salesforce loves to say they were first and they are doing bigger jobs in the. Alesforce software indeed they have done quite well. Oracle is largely attacked every other piece of the cloud. The most interesting thing they are doing is not just database in the cloud. All kinds of applications, hr applications to compete with work day, some crm to compete with salesforce. And they are the leader in erp in the cloud. The biggest areas of software, they are there in size. Very well and lots of areas. Add to that they are really doing they are really going right after amazon. Theyre Building Data centers and bringing lots of their customers into their own club. It makes sense of the sun at position very the sun acquisition. There offering topoftheline computational power. They attack salesforce, microsoft, workday, and amazon. Com. Theyreing over going after all of those in the cloud. Ly mark earned is on the lets move on to adobe. Growth areaistent they did not do enough of a beat and a raise. What are these companies doing with a better environment than they might have seen a year ago . They are stay where they were a year ago. 25 growth for the year for adobe but also 25 growth for the quarter. The lack of acceleration might be disappointing for bullish investors. They will be able to put a lot more money to use with the tax cut. If companies spend a lot more , they will be spending money in software first. You might expect them to guide up as a result of that but it did not happen. All right, cory johnson in new york. Thank you so much. Coming up, the boat to overturn Net Neutrality may have come. But the fight is not over. If you like bloomberg news, check us out on the radio. You can listen on the Bloomberg Radio app. This is bloomberg. Alisa i am Alisa Parenti in washington and you are watching Bloomberg Technology. U. N. Ambassador to the United Nations nikki haley today presented the u. S. With what she says is undeniable evidence iran is violating International Law by providing missiles for rebels in yemen. The nuclear deal has done nothing to moderate the regimes conduct in other areas. Aid from irans revolutionary guard to dangerous terror groups is increasing. Missiles and advanced weapons are turning up in war zones across the region. Oris hard to find a conflict terrorist group in the middle east to that does not have irans fingerprints all over it. Whip saysate majority john mccain should be available for crucial votes next week to overhaul the u. S. Taxes. Mccain is being treated for side effects for his undergoing ongoing cancer treatment. Planspoke by phone about ryan has to leave congress. The president did speak to the speaker not too long ago and made sure the speaker knew very clearly and in no uncertain terms, that he was very unhappy with it. The speaker are sure the president those were not accurate reports, and that they look forward to working together for a long time to come. Vladimire kremlin says putin and donald trump spoke by phone today to discuss north korea. Moscow said washington requested the conversation. President accusations trump colluded with russia have hurt the u. S. Political system. Countriesom 28 e. U. Arrived in brussels today for a summit on security and advancing brexit talks. Lawmakers will debate whether sufficient progress has been made to move onto the second phase of future relations and trade. It comes after they voted to give the snp final say on brexit. British royals and theresa may join survivors and families of those who died in londons g renfell tower for Memorial Service today. 71 people died in the blaze. Princes and others joined them in the cathedral. Months after the june 14 fire that engulfed a block in london. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Alisa Parenti. This is bloomberg. Bloomberg technology is next. Emily this is Bloomberg Technology. I am emily chang. The obama eraturn internet protection known as Net Neutrality. One of the top sites has been the online community, reddit. They have been very vocal about their anger over the fcc vote. They said it is a beginning, not the end. While the fight to preserve Net Neutrality will be longer than we had hoped, it is far from over. Remainwill continue to involved was talkingoner about why he thinks today is a great day. You think it is not. Why . Fore it is a setback people who believe in a free, open, fair internet. The real winners today are isps, large ispsk wh are , who would like to pick the winners and losers online and stifle competition. Those are the ones hurt worse by this decision. I look forward when we repeal this title to rule, those rule,ers title ii consumers will benefit as a result of increased competition. Emily he thinks smaller isps will benefit. You think he is wrong . Steve i do. I do not know the last time deregulating monopolies increased competition. Emily what are the consequences . Steve if Net Neutrality is absolutely gone and to be fair, we have a long way to go before we are at that point, we are back where we were 10 years ago. There are plenty of the examples of at t blocking skype, charging extra to use facetime, comcast blocking bitcoin. If they had a chance to kill netflix in the womb, they probably would have done it. Emily do you think that will happen now . Steve absolutely. There is only more Competition Online and the stakes are as high as ever, because the internet is largely replacing other forms of media. Emily you think the netflix of the future will not have a chance . Steve will have a difficult time, yes. Emily what are reddit saying . Steve it is a rare opportunity for reddit users to agree across the board. They are upset, the same way Many Americans arent set. Is ayou see on reddit reflection of what is going on in the real world. Americans polled say they are in favor of Net Neutrality regulations. Emily what can reddit as a company do . Steve we can organize the voice of our users and point them in the right direction. We believe the most effective course of action is to reach out to your representatives, senators, and voice your opinion. Because they have a lot of influence on this. The fight is not over and it is important representatives know what your feelings are so their actions can reflect the will of their constituents. Emily you have been doing more you say to take on Online Harassment and trolling on the platform. What progress have you made . Steve at the beginning of the year, our responses were 100 reactive. The user would report the activity and then we would address it. We are over 60 proactive, catching bad behavior before it even affects users. That makes a real impact on your experience on the site. Emily you have your own running with the trump trolls, editing user comments. You apologized, said you regret it. But it is that abuse of power people are concerned about, power consolidated. Steve in that case we had some supporters doing what they do best, accusing someone they do not like of being a pedophile. Replacedinside instances of the username as a joke. I do not think conflating that sort of prank with limiting free speech online and limiting competition is a fair comparison. Emily what kind of abuse of power would be possible in a world where Net Neutrality does not exist . Steve the challenges that the largest isps in the countries are also the largest Media Companies. These Media Companies have disproportionate control over what you can do online. Most consumers in the United States can only choose from one or two isps, so there is no real competition. If your competition is between not having internet having internet or not having internet, it is a problem. Emily there were trump trolls over the first year of the administration. Steve calling them trolls maybe a little unfair. I will try to take the middle ground. It is not an opinion a lot of americans share this point. If you look at his latest approval ratings. You see a lot of people blindly supporting trump, which i think is disappointing but not surprising. Emily are those same people against the repeal of Net Neutrality . Steve it is hard to say, i think they are torn on this one. An issue that causes cognitive dissonance for people who want to blindly support trump, but this one is pretty obvious. Emily i am curious about the bitcoin conversation. You have a lot of cryptocurrency enthusiast on reddit. What are the conversations happening that may be not yet hit the mainstream . Steve the Bitcoin Community on reddit is as old as bitcoin itself. Needless to say, the last couple weeks people have been very excited. Probably irrationally excited. If you want to know what is going on in bitcoin, the reddit communities are the best places to start. Emily great to have you back your on the show. We will be watching to see how you proceed against the repeal that happened today. Amazon is extending an olive branch to google. The ecommerce giant announced it will once again sell googles chroma site. Also reviewing sales of apple tv devices after a twoyear hiatus. Coming up, the 52 billion disneyfox deal could leave the house of mouse to become the next streaming giant. Could they become a threat to netflix . This is bloomberg. Emily more now on the massive deal between disney and 21st century fox. Ever since they ended the agreement with the netflix, you could say the company has gotten serious about standalone streaming. With this deal, disney gets a leg up to more users. Here is what bob iger had to say earlier on bloomberg tv. We have long expressed the desire to have a direct to consumer business. We think that is the way of the world these days. Not only does it provide users with fair opportunities in terms of personalization and customization, but it provides the company with more opportunities in terms of reaching more consumers in more consumerfriendly ways. It is a compelling argument in terms of creating value. We will use fox assets in terms of intellectual property and creation abilities to growhulul to grow hulu at a more accelerated pace. Will have the disney brand direct to Consumer Service and sports. What you did with the disney and the netflix, ending the licensing agreement, doesnt make Financial Sense to end any agreement they had with netflix . Netflix has been a great partner to us. We considered ending that relationship very seriously, because of the revenue generated for our company. But we are in the business of creating longterm value, were in this for the long term. As we look ahead and saw the world i just described, where direct to consumer proposition was more compelling for the consumer and distributor, we believed it was time. We will take that approach. It was time to exit the netflix relationship. There disney ceo bob iger and our reporter joins us from l. A. To talk about how disney can become a streaming powerhouse thanks to this acquisition. I want to start with hulu, disney now has a majority stake with hulu. What does it mean for hulu . For the shortterm it does not mean much because disney will not be able to change anything until the deal gets approved. But in the long term it means for the first time in hulus existence, it has one company in control with the ability to make decisions. Hulu was founded by nbc and fox. Then disney comes in. Get suffered between fights with different board members, different strategies, it has had a bunch of ceos. If disney can settle on one thing to execute and the leader it believes in, that will be a positive for hulu, moving forward. This deal gives disney that would position it well competitively, versus netflix . Tv studio has some of the best assets and movies in the world. They have the simpsons, the avatar movie franchise. That goes to disney, which also owns some of the most valuable tv shows. You would be hardpressed to find a company with more of a treasure trove of intellectual property. That is what you need to make these streaming services work. We talked about disney taking movies off of netflix. That is forced netflix to try to build its own studio in house, but it takes a lot of time. Disney now has the benefit of owning two different studios. Emily netflix is spending billions of dollars to make that happen. The deal puts disney into debt. But who is in a better financial position . Lucas right now, probably disney, because of all the cash their businesses throw off. For netflix, but that is on longterm growth. They are barely profitable, worldwide. Disney makes far more in revenue and profits every quarter. For youram curious thoughts on these it disney succession issues. Now it is four years out, but there is top up talk of James Murdoch. There are success in succession questions. Thosehape do you think conversations will take . You find people hardpressed to believe bob iger wants to leave and give up control, one of the best jobs in Corporate America in the world, unless he has a clear next act. We have seen several times he has extended his tenure. Through 2021 there will continue to be talk about it. My guess is it will be needed a bit because he is here the next three or four years. Unless they were to give inclination James Murdoch or someone else from the fox portfolio or someone else within if at were next in line, some point in this process they name a coo or make it clear there is a successor, that would obviously change the terms of the conversation. Until they do that, i think iger bought a couple years from this speculation. Emily lucas, thank you so much for that update. Targets attempts to challenge amazon in ecommerce orders. The shipt acquisition, thanks. And, on location at j. P. Morgan this friday talking about fixed income, and this weeks special bank decision. This is bloomberg. Emily a stock we are watching, shares of twitter rose as much as 7 in thursdays session, the highest level in more than a year. They incite increasing odds of a twitter by up, following disneys deal to buy 21st century fox. Also, this tweet from goldman man blankfein. Caption, and they say i dont know jack. Target is getting ready to bring same day delivery to most of its stores next year. They are purchasing the grocery delivery start up shipt, in an all cash deal. At about half of its 1800 stores by next summer. Fromng us, ian sigalow greycroft. Has two targets target is interested in. Shoppingr ecommerce carts, check out. They do this for many merchants across the United States. They also have a Delivery Fleet which numbers around 21,000 active drivers. Put that in comparison, roughly 1 8 the number of active drivers uber has in the United States. Emily is it all about fending off competition from amazon . Ian on one hand, yes. On one hand, no. Amazons fresh business is small. Wholeacquisition of foods, it is relatively small. I think target is very forward leaning with this acquisition. They are thinking about how to bring their grocery Business Online and power other grocers online business. Emily it is a question how much Grocery Shopping will move online. It has moved online fairly slowly. Many saying they just prefer to go to the store. Do think this is ultimately a majority online business, or that it will be fairly split . Ian i think it is a majority online business. For a category right now, it is about 1 to 2 online out of 800 billion to 1 trillion of consumer spending. There are guesses that in the next five years it will be between 5 and 10 online. That is a very large movement, 80 billion of purchase behavior moving from instore to online. Once that starts, it ends up growing very fast. Grocers are a relatively lowmargin businesses. If you take away 10 of their customer base, they start to full to. Emily looking at your other investments, you have invested in other food tech and payments. What are the trends you are focused on going into 2018 . Ian right now i would say health care is a major trend for us. We are looking at told and software to provide efficiency and care to individuals in the home. Were expending a lot of time care,g at fintech Health Consumer markets, i think the third trend is direct to Consumer Products. Every year there is a new Consumer Products company that pops up that is attacking a legacy business, such as png or unilever, built entirely online. Emily you invested in venmo and braintree. Is cryptocurrency on your list . Ian we have invested of a handful of companies that use blockchain, we invested in one company that is a cryptocurrency based business, although it is not on the consumer side that they help businesses move money out of africa, largely, because there are a lot of currency controls and those countries. G is a customer of them. But largely i am not investing in cryptocurrency itself. Emily we have been talking about Sexual Assault accusations against the chairman that announced today he is resigning from sherpa capital. What is your reaction to these allegations, and plans to address the climate for women in entrepreneurship Going Forward . Know him, so i cannot comment. But from a greycroft perspective, we have a female partner, one of the three founders. Time, there were not very many females in the Venture Business 11 years ago. There are quite a few today. Internal study. Over 40 of our Portfolio Companies have a founder that is either a minority or a woman. Emily ian sigalow, greycroft partners, thank you for joining us today on Bloomberg Technology. That does it for this edition of Bloomberg Technology. We are Live Streaming on twitter. P. M. In new york, 2 00 in san francisco. This is bloomberg. Cannot live without it. So if you cant live without it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Betty stocks fell and the dollar heads for the first weekly drop this month on concerns the tax bill will struggle in the senate. Paul marco rubio and Susan Collins both it is sized tax cuts for the rich. President trump says it is all about the middle class. Betty stocks surging on the disney agreement. It includes most of mr. Murdocks media empire. , alexaet smart siri