Headlines making stories today. Peter cook has an interview with the ceo of Marsh Mclennan. Antennae look at aereo manufacturing plant. We begin at the u. S. Supreme court as justices hear arguments in the controversy alsial aereo case. No clear answer to how the court will roll. Certainly a lot of tough questions. Justices were concerned they were using a technological gimmick to get around the broadcasters copyright. That said, also a number of justices that were concerned about the implications, in particular they asked about Cloud Computing and whether the ruling might limit that industry. Earlier today on bloomberg, especially addition of the in l loop the ceo gave exclusive comments. I do not think anyone can forecast what will happen. That. A fools game to do mainly because i think we feel very confident in the facts. I think as a matter of law, we are dead right. It is the United StatesSupreme Court, no one can predict. You are giving us a sense of the copyright question yesterday. Is that something could justices seem to zero in on today. Co they spent a lot more time talking about technology than the actual ball. This case is at the core about copyright law. In particular, there is a provision that says if you have a copyright, i cannot publicly perform your copyrighted material without your permission. The question is whether aereo, whether they are publicly performing the broadcasters content when it transfers when it uses the antenna to let users use them to pick up thousands of copies on their own. Do we have any sense of what the broadcasters are saying about that argument . Broadcasters are saying lets not be lost in the technology. Bottom line, it is something that everyone else pay for if they are going to distribute it to other people. Cable companies and satellite companies. One of the justices made that point today, basically saying you are the only ones not paying for the content. It is really the big picture broadcasters are looking at i. Do we have any sense of how this might rule and what the overall implications will be for whichever side wins . Wouldruling for aereo have much bigger implications. We will just have to see what will happen there. That would be of much bigger implication. Other services could join the Cable Company and they could form their own service. Some broadcasters are talking about converting to cable channels. The industry will really change if they win. If they lose, the implications will be far less dramatic. May just be business as usual. We will have to see how exactly the court rules before we say that for sure. Extra earning us from outside the high court. Thank you. Senior west coast correspondent Jon Erlichman here in new york for a few days and joins me. The implications are huge. Definitely. You are talking about an industry, the broadcast industry that relies very heavily on the money gets paid. The numbers people have heard a lot about over the past couple. F days over the past decade those numbers will continue to climb. You have an industry that wants to protect the money it is able to generate from channels. Speaking of generate from shows, do we have any idea what dollar amount we are talking about . Certainly when you look at where the money is going to go for the next decade, there have been discussion from the industry generating 8 billion from the paid tv players. Think about the Technology Behind what it is all about, it is a really interesting development. We have a little bit more on that now. At this manufacturing , machines are assembling hardware. This is the antenna. We have found a great design him a did a lot of work on it, customize it and achieved great informant for the size we have. They gave us an inside look at the busy factory where the final product comes together. Our product that is revolutionizing the way we watch broadcast tv. When you see have the technology works, it is different than using oldfashioned rabbit years. They run each antenna to an individual subscriber but they are not mounted on top of the tv. Instead, they are stacked on boards and slide into a box that sevencommodate 5000 to thousand antennas and mounted on rooftops in cities across the country. They send the signal to a transcoder and then allows you to stream online and pause, rewind, and record. A standard master antenna is all the spectrum and pushes it down the wire to you, whether you as a customer wants it or not. This is a model in which you are only listening to what you want. What is the capability of what you can manufacture . It will be huge numbers. Many more than what we put in the field already easily. They plan to operate in 22 cities by the end of the year and have built the business to accommodate whatever level of demand comes its way. We can support 5000 customers and make a profit on that. And then we can grow on that. It is a very analog business model. When you think about the size of the antennas, one of the things you like to point out is if they were to make it larger to make a go and grab a lot of different signals but it is only going after one signal. Perhaps that plays into the argument it is more of a one to one relationship. Thank you. This disclosure, Bloomberg Television has a distribution subscriberseo, get two dozen over the air stations plus bloomberg tv. This was not only big headline out of the Supreme Court today. Justices reese released a decision dealing a blow to affirmative action, racial preferences at michigans public universities. Megan hughes is following that case. What did the justices say about the band . First, lets talk about what is at issue. A voter approved ban on Michigan School admissions and hiring back in 2006. The justices by a 62 vote said it was a legitimate subject be put before michigan voters. To be clear, the decision was about whether the states ban amounted to discrimination. Not about whether the programs themselves did. Just to put this into perspective, michigan one of 10 states that outlaw race conscious admissions. This could encourage other states to do the same. The back story here am a a decade ago to the university of michigan one another famous case that actually allowed institutions around the country to view race as a factor in that mission. Todays decision the loaf eyes that decision for the very same schools that pop for it. Also turned around a federal Appeals Court decision that said michigans ban had essentially stripped minority of the constitutional right. Blackents point out enrollment is down about 30 since the ban took effect. Including of the ban, the state attorney general from michigan who fought for this, they point out 58 of michigan voters approved a ban. He said in a statement the u. S. Supreme court made the right call today. The state constitution requires equal treatment in College Admissions because it is fundamentally wrong to treat people differently based on the color of their skin. Justiceses two dissented. Justice elena kagan did not take art. She was the solicitor general for the administration so she was not able to get involved in this case. Was this a surprise the justices ruled this way . It was not a surprise. Chief Justice Roberts leaning to decision. Nd in the last term they overturned part of the Voting Rights act that was designed to protect minorities at the pole. Another decision that ordered tougherjust screening. This is really in line with what we have seen from the course so far. Megan hughes, thank you. Since 911, the u. S. Government has provided a backstop in the event of another terrorist attack. Time for the backstop to end . The ceo of Marsh Mclennan says no. We will tell you why when we continue in just a moment. Now the latest on the crisis in ukraine. Vice President Biden warned russia time to stop talking and start acting to reduce tension in ukraine. The Vice President showed support for the besieged nation, 50 billion in aid for political and economical change. He called on moscow to protect separatists to vacate government buildings and check points except amnesty and address the grievances politically. No nation has the right to simply grab land from another nation. Has that right and we will never recognize russias illegal operation and crimea, and neither will the world. As was demonstrated by the overwhelming vote that took place in the Security Council and the general assembly. Bidens tripdent comes as an International Agreement aimed at stemming the crisis appears in doubt. The Insurance Industry keeping a careful eye on another looming deadline in washington. At the end of the year, the Terrorism Risk Insurance Program put in place after nine 11 will expire. Insurance and leader industry backstopre to stop the poses a risk to not only the economy but not everyone is convinced. Peter cook spoke to the ceo of Marsh Mclennan. He joins me now without exclusive conversation. Good afternoon. The government stepped up as a backstop when it was clear that private Insurance Industry cannot afford to offer terrorism insurance given the risk of another attack at that time. More than a decade later, critics contend it has become another washington bailout that taxpayer simply cannot afford. Very mclennan ceo has a different view on that. He was in washington to release a new report on the issue and what might happen if the government backstop went away. We spoke on capitol hill. Did not getogram reauthorized, you would see pretty big of peoples in the Workers Compensation market and property market. I think it would have an impact on growth and employability. A lot of people out there who look at the program and remember when it started back in 2002 and they remember the words, temporary program. Such a bigs become issue to the Insurance Industry, Business Community today, so many years later, why has there not been an end to the program is one question i asked . That is a good question really an unfair question. The circumstances that existed that made a program like this necessary still exist. You cannot take an industry like insurance and make Insurance Companies provide infinite capacity. Be against all the underwriting principles. Many people do not realize workmens Compensation Insurance has no exclusions. That may cause workplace injuries injuries. It would only write the coverage at all. Particularly for metro areas and companies in Sensitive Industries or those that have high concentration of employees, that exposure is always going to be there. In fact, i know the senate has been talking about a bill in the reauthorization for another seven years, and i think that is terrific. Seven years from now we will have the same issue. I would sather rather see this done on an evergreen basis. No one in this town likes the word bailout, but effectively this is what it would do if god forbid there was a terrorist attack. I think we have to look at separate outn property insurance and workmans Compensation Insurance. Property insurance the market will pay. It will be a very ugly situation if insurers were forced to provide unlimited terrorism insurance with regard to large property risk. I think what you would find in the chill on investment, because there is no investment without insurance and insurance levels would come down. As each Company Evaluating their own exposure and capability. The programat itself, this actually works as intended. This is an ideal Public Private ownership arrangement. It is not a bailout. It is actually a backstop. Nofederal money spent, taxpayer money spent. All it really means is the federal government would act as the reinsurer before losses in exceeded 1e million. Each Insurance Company would have their own deductible. A deductible equal to 20 of the gross earned premium they have from the year before. This is truly a program that would only attach in the event of a catastrophe. Even supporters in the senate bill are calling for a greater stake in the industry itself. 20 deductible and raising the coshare, the percentage the industry would have to pay out in the event there was an attack on 15 20 . I think in both times where reauthorization has occurred in the past, there has been more shift from the theoretical private backstop or public backstop to private companies. Not surprising there is a big shift toward private companies as well. Lex we are hearing pushback from the industry. It has competitive impact, because the burden falls more significantly on midsize and smaller Insurance Companies as opposed to larger. In april. E are the deadline december 31. What is your sense right now . Year. A midyear election Midterm Election year. How worried are you this does not get done . Ceo in their pate to were read. I have been in the brisk business for 30 years. All that we can tell is the prognosis is still pretty good. Has aality is uncertainty Chilling Effect on business. From that standpoint there are actions already being taken place today that have an impact today. A subtle impact. Anticipation that in the unlikely event that it is reauthorized, what would the impact be . For example, certain Insurance Companies that are declining to write workmens compensation risk or are pegging the expiration dates with december 31. Committees in both the house and senate expected to take up the issue when they come back from the easter recess in the next couple of weeks. Given this is an electionyear time already running short to get anything done in this congress. The clock is ticking effectively. You will hear more about it in the coming weeks and months. Anyone really talking about not extending the law at talkingmost people about extending it but perhaps limiting the government backstop a little bit more and asking the Insurance Industry to take on more of the risk. Peter cook with the exclusive report. Thank you. Back with an on the markets update for this tuesday. Stay with us. This reminder, there are multiple ways to watch Bloomberg Television. On the web and that mobilerg. Com, your device and apple tv and amazon tv. Coming up on 26 minutes past the hour were. Past the hour. Julie hyman joining me now. Do with theo combination of factors. Corporate earnings, some of them coming out higher than expected. We will talk about that in a moment. A lot of deal action, particularly in the pharmaceutical industry. The nasdaq clear out performer, up almost double what we are seeing for the s p and dow on a percentage basis. A couple of individual stocks, harley davidson. I mentioned earnings. Shares setting a new fiveyear high after they posted firstquarter profits that beat estimates. The move toward lighter weight hikes have been winning over international writers, crossing overseas sales to rise 11 . Also looking at netflix. The online Video Subscription Service planning to charge new customers a couple dollars more each. That coming on top of an earnings beat for netflix. In three quarters of a million internationally. That is higher than forecast by the company. More on the markets in 30 minutes. Welcome back to the second halfhour of bottom line on Bloomberg Television, im mark crumpton. Thanks for staying with us. Lets check out the top stories were following for you at this hour. President obama plans to visit a town near seattle where a mudslide left at least 41 people dead. Dozens of homes were buried in the town of oso, a an hour northeast the seattle. Crews continue to dig through the wreckage in the search for bodies. The confirmed death toll from last weeks ferry sinking off the coast of south korea stands at 113. Another 190 people are missing. Rescue Officials Say most of the bodies in the submerged ferry have been found on the third and fourth floors where many passengers seemed to have gathered. Many of the people onboard were High School Students and they were housed in cabins on the fourth floor. A group of ranchers, farmers and Indigenous Leaders held a ceremonial horseback ride from capitol hill to the National Mall in washington in protest against the keystone pipeline. This as nebraskas governor asked the States High Court to dismiss a challenge to the pipeline. The court case is delaying the white houses review of the proposed Transcanada Pipeline project. The court may not hear the case until september and may not rule until after Midterm Elections in november. Thats a look at the top stories in the news at this hour. U. S. Existing home sales headed lower for a Third Straight month hitting their lowest level since july of 2012. A senior economist at Wells Fargo Securities joins us now from charlotte, north carolina, welcome back to bottom line. Always a pleasure to see you. Thank you. Thank you so much. This has been going on, as i just mentioned, for three straight months. Its also the seventh drop in existing sales in the past eight months so this isnt an aberration, it is a trend. Has the recovery stalled . You know, that is a great question. Of course anything thats more