The tough job that awaits her replacement. This week, the Trump Administration took a big step towards voiding obama era Net Neutrality regulations. The current fcc chairman announced tuesday he plans to hold a december 14 vote on overturning the protections. The regulations are intended to prevent broadband providers from favoring their Business Partners offerings or their own video and other content. He spoke with Bloomberg Radio to defend his decision. Take a listen. The fcc would require that all Internet Service providers be transparent about their Business Practices if they are blocking or throttling content. They have to disclose that, and we make clear that the federal trade commission would have authority to police broadband providers if they are behaving in an anticompetitive way. Through those two rules, we would be able to protect consumers Going Forward and promote investment in networks that are necessary to promote digital opportunity. Emily we caught up with his predecessor, the man who led the fcc during the Obama Administration when those protections were instituted, tom wheeler. Mr. Wheeler transparency is the solution, so all that is necessary to do something evil is to tell you that im about to do something evil. That does not make any sense. And then, what do you do once you have that information . 2 3 of the households in america have no other choice as to where they are going to get their internet, so this is to go out and claim that somehow this is some kind of Consumer Protection is a fraudulent representation. Emily they say their proposal is more fair, more proconsumer. What makes you think it is the opposite . Mr. Wheeler in the name of Consumer Protection, they are they say they are not going to protect consumers. In the name of better regulation, they say they will turn it over to the fcc. And yet this afternoon, commissioner mcsweeney this afternoon tweeted that even if they do that, the ftc does not have any authority. They are just running away from their responsibilities. Emily the big concern is how this impacts the haves and havenots, the folks who could increase future innovation, be responsible for future innovation. How would this impact the haves of the moment, googles, facebooks, netflix . Mr. Wheeler i think the important thing is how it affects everybody and their ability to get on the internet and for consumers to reach providers and providers to reach consumers. What were seeing here is the cableization of the internet. If you like your Cable Company and the way they choose which channels you can see and the way they continue increasing prices, you will love what happens under this repeal. Because suddenly, the people making the rules are the networks. And the consumers cannot survive without the networks, and the Service Providers cannot survive without the networks. Emily how can we hold isps accountable . Mr. Wheeler that is what we did in our open internet rule. We said there are some rules you have got. No blocking, no throttling, no paid prioritization. You have to provide information to the consumer, and we will put a referee on the field to look at what your continued actions are as Technology Evolves and throw the flag if necessary. And what the trump fcc is doing is just turning its back and walking away and giving the Network Companies everything that they have asked for. Emily this is unfolding against a very interesting political backdrop. Of course, we mentioned earlier what is going on with at ts proposed merger with time warner, the doj now suing at t. How much of this is politically motivated . Mr. Wheeler i cannot answer that question. I do find it shocking that the trump fcc from day one has gone right down the line for what the Big Companies want when they are supposed to be representing consumers, not the companies, and the fcc continually turns their back on their congressional mandate to protect consumers. Emily by all accounts, it appears this will happen in december. For you, what is it like to watch your work be undone . Mr. Wheeler [chuckles] i have had better thanksgivings. No, i think the answer there is that this is a long process. Yes, it appears as though they have the votes to overturn it in december. Then it will be up to the court. The decision we made twice went through the court and was twice affirmed by the court, and i hope that the court will look at this and say, hey, wait a minute this has been in effect for two and a half years, and there have not been bad things that resulted. Why are they turning around and going the other direction . Emily that was tom wheeler, the former fcc chairman. Lets get the other side. Robert mcdowell is the former republican fcc commissioner who served under both president s bush and obama and joined us right after wheeler in support of a rollback. Mr. Mcdowell we are going back to where things were in 2015 and what is being put back into place is clintongore administration policy. The internet ecosphere, i think we can all agree, was exploding beautifully before 2015, before these old 1934 rules under the 1934 Communications Act was put on Broadband Internet access. You have section five of the federal trade commission act. You have section two of the clayton act, section seven of the clayton act, actually. You have a lot of protections. You have the terms of service with each broadband Internet Service provider, which is a contract with consumers. If they were to discriminate in a way that harms consumers, there would be an avalanche of classaction lawsuits, for instance. There are so many protections that were already in place in 2015 before title ii was imposed into the internet ecosphere, so it is actually going to be just fine. The sky is not falling. There is not going to be some internet dystopia coming. Its going to be the same place better place, actually, as we look to invest 300 billion in new mobile technology that we will need over the next decade, to have america continue to lead the world in wireless and really wire up the internet of things. Its going to be a great decade coming up. Emily we just got a question from a viewer who asks quite plainly how this actually helps consumers. Mr. Mcdowell since 2015, we have seen a stutter step in investment in broadband networks. A number of independent studies and market analyses suggest that capex has been curtailed in this space because as you had in a previous segment, the sword of damocles of rate regulation was swinging over isps, so title ii was created for the ma bell monopoly. It has about 1000 different requirements. The fcc became the agency of mother may i . Can we innovate in a way that is proconsumer . The fcc was this bottleneck all of a sudden for innovation and experimentation in the marketplace. Keep in mind, by the way, that over 90 of consumers have a choice of four mobile broadband providers. Mobile broadband speeds are much faster than dsl or cable modem speeds were 10 years ago, and they will be 100 times faster after we wirelessly connect with 5g the internet of things, so its going to be a wonderful time. Emily how do we hold isps accountable when this is mostly honorsystembased . Mr. Mcdowell it is not. There are many laws in effect here. It is not honorsystem based. What prevented them prior to 2015 from behaving in an anticompetitive way that harms consumers . It was section five of the federal trade commission act, the clayton act, but also economic incentives. It was the market. You have a competitive marketplace for broadband, and it is primarily mobile broadband. We see cord cutting and cord shaving. My kids are watching video on devices like this through mobile broadband connections that may be licensed or unlicensed. You have market pressure, and you had other laws already on the books prior to 2015 that protected consumers, protected entrepreneurs, protected investors, and it gave us this great internet ecosphere that we enjoy today. So, it is a myth that consumers are unprotected. Quite the opposite. Emily we have also been talking about the doj suing at t over its attempt to acquire time warner. Earlier with tom wheeler, we were talking about how much of all of these issues are politically motivated. Im curious for your thoughts on that. Mr. Mcdowell i worked closely on a lot of these deals. While i was there, many big deals. And we worked closely with the department of justice and the federal trade commission on these deals. What we are seeing is a reinvention of antitrust law or an attempt to do so with this complaint. There is a reason the government has not challenged a vertical deal where a distributor is buying a supplier in nearly half a century. That is because they tend to fail or there is no competitive harm. Right now, the jurisprudence, the case law is really stacked against the government. The government has the burden of proof here, and we are going to see an interesting case. Get the popcorn out because there are two companies in america that know the most about antitrust laws. Exxon, the old standard oil, and ma bell, at t. And at t was willing to go to court in 2011 for a horizontal merger where they were buying a competitor. But the fcc killed that deal. But they were more than willing to go to court, and they are more than willing to go to court and win. The government has a huge burden to overcome and would really be creating a new precedent as they try to argue in court. So get the popcorn out. , it will be an interesting couple of months. Emily that was former fcc commissioner robert mcdowell. Still ahead, ubers hacking setback. Coverup deals a setback to turnaroundowned efforts. Ubers new c. E. O. Finds himself in apology mode again. If you like bloomberg news, check us out on the radio. This is bloomberg. Emily this week, we learned uber covered up a massive hack attack affecting 57 million accounts. In 2016, hackers stole the data of 50 million customers and 7 million drivers. Uber and Travis Kalanick kept the breach concealed for a year. This week, the company ousted the chief Security Officer and another executive for their roles in keeping the hack under wraps. Rather than report the breach, uber paid the hackers 100,000 to delete the information. Eric newcomer broke the story and joined us with more. Eric more than a year ago, uber heard from the attackers they found a way to get names, telephone numbers, that sort of information on 50 million riders and 7 million drivers. And most importantly, drivers license numbers for 600,000 drivers. The concern is that is information that uber was required to disclose and did not. Now more than a year later with a new c. E. O. , the company is deciding to come forward and say that they should have disclosed this information, and here is what happened. Emily Dara Khosrowshahi is telling you none of this should have happened. He will not make excuses, and they are changing the way they do business. Uber has been negotiating with regulators over privacy issues for a long time. What makes them think they could get away with Something Like this . Eric while they were talking to the federal trade commission and just after negotiations with the new York Attorney general, they faced the question of what to do about this hacking. Its hard to imagine this engenders any sort of trust with regulators. You already saw in the instance in london where regulators revoked their license that part of the issue was they just did not trust uber and that the company had not really represented very clearly what had gone on. This is another sign that uber is willing to go to Great Lengths to hide information that it now believes it was required to report to regulators. That will give cities, states, and National Governments all over the world serious pause. Emily how can we be sure this information did not get into anybody elses hands and that the hackers did delete this information . Eric right. Normally, hackers will sometimes wait and sit on information. That is certainly a concern. Ubers belief is they did pay the 100,000. They had evidence perhaps that the files were actually deleted. We do not know who the hackers were, but they refer to them as these two individuals. I think right now, there is a belief that that information is not out there in the public, and of course uber is offering Data Protection for the drivers affected by the most serious information breach. Emily what did former c. E. O. Travis kalanick know and when did he know it . Eric always a good question. A lot of this falls to joe sullivan their chief security , officer and also their deputy general counsel. He has now been ousted along with another senior attorney. Kalanick knew in 2016 the hack had taken place. He knew the company had been negotiating with the Attorney Generals Office in new york and the ftc. There are questions about how much he knew, the legal reasoning and legal obligations behind the decision, but he certainly knew about the hack and the scrutiny uber faced. Emily what kind of penalty could uber face . Could they face some sort of consequences from regulators, could they be hit with a lawsuit in fact . Eric anything is possible. As we reported before, uber faces ongoing criminal probes that have touched at least five different areas. This is a company that over time regulators and Law Enforcement officials are looking at, and there are dozens of civil suits against uber, so it would not be surprising that Something Like that could happen. But i think we have to wait and see what the actual consequence is. But you have to imagine a some sort of monitor or attempt to make sure that uber is doing what it says is doing is something regulators or Law Enforcement is going to be thinking about after these revelations. Emily i know it may be hard to keep track of all the open investigations, but what do we know about the status of those and whether we are likely to see any kind of penalty . Eric we have not heard a lot new since my big story last month saying that there were these five investigations. I think one interesting fact is that joe sullivan, who has been ousted as part of this incident, was at the center, or at least his organization was at the center of some of those things. You hear about greyball, the software meant to help in some cases uber drivers evade Law Enforcement. That was something sullivans team was responsible for and something investigators have looked at and may still be looking at. There are so many questions and Dara Khosrowshahi has to keep playing cleanup, and he knew that was what he was coming into. Maybe he did not know quite the extent of it. This one, the data breach, is a total surprise. Uber has so many problems. The idea there is a new one is just shocking. Emily tesla is spending an average of 8,000 per minute as it ramps up production on its allimportant model 3 sedan,. That would put the company on track to exhaust its current cash flow by early august, although the pace is not expected to continue. Tesla has said it has ample money to meet its target of producing 5000 model 3s by the end of march. Coming up, the doj is hitting at t hard. Details on the lawsuit that could block at ts 85 billion takeover of time warner. This is bloomberg. Emily big news for tencent, the tech giant has become the First Chinese company to be valued at more than 500 billion. This just three months after it topped 400 billion for the first time ever. It joins apple, alphabet, amazon, microsoft, and facebook as the only companies valued at more than 500 billion. The chinese startup is looking to fly passenger taxi drones. We got exclusive access to its workshop and drone testing ground. Bloomberg news Tom Mackenzie reports. Tom the drudgery of your daily commute could be a thing of the past if these taxi drone makers get their way. The chinese startup plans to build a network of passenger drones across the world. The Company Founders says that vision will soon be a reality. We are waiting for our trial flight permits. When we have the permits, our taxi drones will be seen flying in dubai and other countries publicly. Tom where do you see the biggest opportunities publicly . Definitely commercial use and human carrying drones. Were only at the beginning stages of largescale usage of drones. Especially passenger drones have just come to the attention of the public. Our company has just shifted our attention from technology to the commercial side as we see huge opportunities in the global market. Tom is the biggest challenge the Regulatory Environment . Is that still the number one obstacle you have to get over . The Civil Aviation authorities in uae and china have given us the green light for testing. In china, the u. S. , and many other places, policy makers have put us in the center, working very closely with us every day on regulation. This is already very unusual. Tom is china your prime focus in terms of a market or are you looking overseas as well for sales . The overseas market is indeed bigger than the Chinese Market in terms of purchasing ability. However, we are making our way in china. For example, we signed deals with two local governments and helped them build control centers like this one for them to use our drones extensively in areas such as urban patrol and environmental monitoring. We have seen huge changes in our sales as more than half of our revenue came from deals in china. I expect passenger drones to bring us much more income next year. We have already secured a 1 billion order from an American Company and formed a strategic partnership. The 184 passenger drone will become a star in 2018. Tom you received