Ther, we will talk to Senior Vice President of cbs interactive about the future of Digital Deals amid the era of threat. The big headline this morning, a little monopoly talk. Acquire timeeed to warner cable for 45 billion. Combining the two Cable Companies in a deal. Paying about 159 a share. The dollar shy of time warners asking price. A rare day out in the cold, but here you have it. The darth vader of cable. That is his moniker. I want to bring in alex sherman right now, and he broke this story for us and he covers comcast and Time Warner Cable for bloomberg. Talk to us about the idea of a monopoly here. Have, if they get rid of 3 million subscribers, they will have 30 market share. I feel like they will have closer to 75 of the cable universe. You got it. Question to regulators will be, how do you define the market that often . If you include directv and dish and verizon files, comcast will of all paytv subscribers. If you look at this world as just Cable Companies, comcast becomes really dominant, combining number one and number two. You could also look of at the world of tv viewing these days to include youtube and netflix and amazon prime and who, etc. Then you get a bigger universe be on the 30 . Regulators have to make the choice, are they comfortable so manycast owning cable subscribers and owning the Nbc Universal content portfolio. That is a lot of power in the industry for one company. Them up to about 30 threshold on paytv may not draw much i are out of regulators. I am guessing comcast has done its homework at this point. You think we could not see tther tie up like at t mobile takes forever, nothing gets done, a big breakup fee . No. This is a much different scenario. At t mobile took out a competitor. Comcast and time warner content and Time Warner Cable do not compete. That is a big deal here. Comcast has talked to regulators and they have given them an indication that because of the key difference, there will not be any theoretical pricing difference by eliminating the competitor. The other thing to keep in mind here, Cable Companies getting bigger, they have more leverage to push back on content providers like cbs or disney. That could keep cable bills down and be a benefit for consumers. John is not called darth vader for nothing. He is a smart guy. He has been operating in the media universe for at least a decade. Why would charter not come back and make a 160 bit or a 165 it or a 175 bid. They clearly do not think it is worth it. Correct. Charter put out a statement saying they will be disciplined on price on this. The problem is that charter is just not that big of a company. It is easier for comcast to absorb Time Warner Cable into their balance sheet. Charter would really have to lever up. They were already pushing their leverage target to above five times, which is a lot for the cable industry. Even largered an deal here, they would run into a situation where banks might start to get hesitant on loaning them so much money and Time Warner Cable would certainly resist turning into a company that has so much debt on their new balance sheet. We have to leave it there. I want to ask one thing. What are you wearing right now . Shirt. Ck pants and a t that is not that exciting. Alex has been in the office literally all night long. He is hardworking and wearing a black sweat suit. Thank you so much for joining us. We will check in with you later. As we mentioned, regulation is an issue here. Washington will have to bless the calm cast and time warner combo. Cook, to bring in peter who has more on that part of the story. Down inthe initial take d. C. , even though i know everyone is holed up in their houses and afraid of the snow . The government shutdown, we do not have an official reaction at this point, but any time you combine number one or number two in anything in this country, washington will be initially skeptical. The deal will have to be scrutinized on a variety of fronts. It is not just cable versus cable. It involves a lot more players and what it means in terms of Program Costs and the flow of information on the internet. The fcc will ultimately decide if this is in the public interest. We are a long way from done and it is not clear initially exactly where the government might be. The pros, they do not compete in the same market. A Larger Company could leverage its size to reduce or limit cost. There are possible efficiencies here for businesses. The cons are that they will be big, really big. How will they really push in the pricing front given that. One thing to remember is this company has friends in high places. There was a top high comcast executive at that dinner here. So you think there was a conversation had. Do they need to do anything to sweeten the deal and make the government like it . Or do you think it is fully baked . They have to sweeten the deal. They even said so in their Statement Released with the news of this transaction. They will, at a minimum, offer least 3 million cable subscribers they would be getting from charter. I would keep them below the 30 threshold in terms of cable eyeballs, 30 million customers there. They might have to go further and they might have to again to maintain Net Neutrality. It is something they committed to as part of their deal. Rulingsve been legal against the government and that front. That is complicated, but it is one of the chips they could use and one bargaining point they could make. In the alphabet soup of regulatory acronyms, what are key letters we should look out for here . Doj and sec, i would really watch the key the newry player here, fcc chairman, tom wheeler. He has already brought in the folks from sprint and softbank to express concerns about that in wirelessbination and he is also talked a lot about competition and his willingness to maintain it across the country. A big test for him. Qwest thank you very much. Our chief washington correspondent. For more on the huge deal and how it changes the game for the cable industry, customers and content providers, we are joined by the former president of cnn, as well as the bloomberg deal reporter, cristina alesci. So many interesting points to discuss on this. We have you for the full hour and we are excited. Size in all about delivery of content, internet, etc. , whether you are in the cable delivery business, or you are a former phone company, verizon and at t. All of these guys have to get as big as possible as fast as possible. In the cable industry, this is close to a monopoly. Know, but verizon and at t, they are national networks. The Cable Program is localized there that might be changing. You suddenly have a company that has almost a national footprint, but they have to have that in order to compete against alternatives. Google is developing fiber that delivers 100 times faster speeds than your cable or phone provider does. Good point. How quickly will the industry change . How quickly will Cable Provider who cares . Young people talk that way. Anyone under 40. I talked to our 25yearold producers, they do not have cable. Qwest they do not feel they need it. Less people will have it. One thing everyone is talking about today is the idea of a monopoly. What is not being talked about is the fact comcast investors will have a lot of tough questions. You pointed out the loser here. Is he really . Contest is paying a big price. Malone was going into this with a completely different philosophy on how to use cash. He was going to take advantage of the chief debt market out there. Comcast is using expensive stock. Investors will have a real issue with this deal today. That is one thing they will have to get over. Forget about the sea. We will talk wall street here and focus on what comcast and how comcast will message this deal to investors. Just the other day, we had a chance to speak with a man who knows this well and what he thought about charter top possibly buying, warner. Just buying time warner. I remember saying 15 years ago we would one day get to a place in this country where there are two Big Phone Companies and two big Cable Companies. If he says it, i will not fight with him. He is my boy. Certainly, 131, below where the thing trades now, in what universe does that work . That was john malones approach. What do you think . Fromlearned how to dress parsons when he was my boss. I took an oath there. Regardless of how you pay for the financialat structure is, these companies have to get as big as possible as that this possible in order to keep programming costs down, in order to create even more economy scale, marketing, back office systems. All of that stuff. Comcast had been a leader in driving charter interest. Trying to match the economies to scale. Comcast was achieving. Now comcast has a bigger league. A mucht is that it is bigger universe than just cable and growing. Watchlong as i can bloomberg tv. Qwest toomberg, cbs, it yes bn go negotiate what they want, comcast can say, we own the whole country. Well tell you how much you are getting. Thank you. Cristina alesci. We will be back with more talking about other media headlines of the day. Stay with us. Youre watching in the loop. That theylly wish is had a commercial camp. During the commercial, this man says some stuff funny stuff. Were also joined by the former cnn president. Our guest host for the hour. What makes this man an expert . Take a look. Androducer, onto the north, executive. A treated force in the media for decades. In the late 1990s, he saw the digital revolution before most. A pioneer in digital video. Returned to his roots, but this time, at the top. As president of cnn, he built landmark sews shows. He saw twitter newsgathering value early on. He keeps looking for the next big thing. He today tells us who will win the battle for attention span. Qwest pretty good. That is why we can ask you a number of questions to span the media world. I want to start with apple. When i think media, i think apple, maybe because all of the products we use are made by them, speaking of monopoly. Apple talking about a content deal. What do you think about the integration of cable . It is kind of a dying industry. The biggest need Cable Providers have is a better interface with users. Understand. Qwest there are beautiful sites you go to and apps where they your experience of accessing the information. It is clean and simple. Flip board is gorgeous. You go to your cable guide, just hunting down what is there, it is horrible. Class i keep landing on cspan. Do you have files or time warner . Time warner. Qwest that is to that. Files is wonderful. So fast era in that city, you cannot. It is all about customer service. If you do not like them and they have you on hold for 24 minutes, your other option is nothing. User the user the experience is part of it. How much like my provider has to do with how easy it is to use it. Modern companies obsess over that. Cable companies, throw best, have to catch up. They are spending a lot of money. Can go to files and grande day if you live in austin. Is 100 times the connection speed. It is right for being leapfrogged. That is what is going on. They have got to Pay Attention to this. The downfall is they take their audience for granted and that is an enormous opportunity for newcomers to come in. Time warner cable sees apple and they love to be able to say time warner customers, do not leave us and we have the school apple thing coming down the road. Apple does not have content relationships. That is where these things always washed up on the rocks. Intel is developing a box of their own and it was going to be beautiful and have a fantastic interface. They just have to zip up content deals. It never happened. Who bought them . Over eisen. Verizon wants that beautiful interface and they have got content deals. Qwest use a content and i have to bring us to our second headline. The second is in a house of cards is premiering tomorrow. At midnight,es perfect for valentines day. The number one weirdest thing about you, i think, and there are a lot of strange things about her, she does not have a netflix subscription. Lets talk about why. I am old school. As long as i can watch law and order marathons, i am good to go. Netflix, they have got house of news and orange is the black. Are they really turn into hbo as far as this content . That is my only reason for watch it wanting netflix. Qwest what is fascinating about what they have done is they started out as a Distribution Company. Dvdsled you this created by other people. That is all they did. House of cards pose quote is symbolic of the melding of distribution and content. Comcast is as well. It started out as a Distribution Company distributing other peoples content. Then they started taking a percentage of the channels. Now, they bought nbc. And are now a content Distribution Company, exactly what netflix is doing and where everyone is going and everybody is trying to be both things. Orange is the new black time warner, verizon files, directv, they all have the same crappy guide section. They are all trying to be the same. Facebook, tumbler, twitter, they are all starting to look like and do exactly the same things. There is the new twitter interface. The dangers ofs going public. Twitter just went public. They start out with a revolutionary new concept, a feed, and they are the newsfeed. They go public and now they are under Quarterly Earnings pressure. That means we have got to get more subscribers and users and people spending more time with us. How will we do that . We will start to look like the other guys. We are living in an age that suspect the onset on the onset him the unspecific. Investors needr to look at companies in other ways . Not saying delivered to me right now. Do investors have to change it not twitter . Yes. They should. As an operator of companies, yes, you wish you could escape from that pressure. But, that is the reality right now. You wish companies could follow steve jobsexample. They kept innovating. They knew that innovation was the ticket to growth and not imitation. Qwest we will take a quick break. We will talk about it. On, tim cook, if you could give him a grade. He is not steve jobs or thomas edison. All right. Qwest coming up, snow is falling in new york city again. A big storm snowstorm again. How weather is assaulting salt supplies. You are watching in the loop. You can catch a streaming on bloomberg. Com, any device. Any device. We are totally modern. Qwest we have got a lot to cover. Sit back. Qwest it is not too cold to trade. Bloomberg television is on the markets. Let me first off kick it off with a look at futures here down across the board. S p futures down 6 10 of one percent. All the major indexes are as we await serious Economic Data this morning. Tom keene will be tuned in at 8 34 the initial jobless claims. They will break it down. First off, whole foods, shares cutting the forecast for the future. It is facing competition as it expands into smaller cities. The expansion is cannibalizing. Also, the company be Fourth Quarter profits. It also announced it added 77 million to its reserve. Allegations in china, illustrating just how small the company is. The company has over 300 has spent over 300 million in the last couple years. Jpmorgan, there you go. Banking. I am a whole foods shopper. They serve human meat but only if the human was grass fed. Winter storms, Everybody Knows it, have been pummeling the u. S. And highway departments have been struggling to get the salt they need to keep roads safe. We know that is the case in atlanta. Adam johnson is here to explain the issue. Qwest two issues. A lot of snow. It is not a shortage. Not an assault. We have had 81 major snow events. The average is about 45 typically. That is part of the issue. Another part is there is a total bottleneck of salt. There are only so many minds in the country. If you were to look at a map of the u. S. , there are only a handful of places where salt is mind. One in texas, the big one that looks like a full moon, they account for almost half of the salt. You can see why atlanta has got a problem. They are not near the salt lines. The president of the salt induced institute said, there is not a salt shortage. It is a bond and abundant supply. Many are ordering midseason and it did and there is lead time. No preservatives necessary when you store salt. Correct. There arel alternatives. There are additives. You take regular rock salt, like table salt but bigger, that will lower the Freezing Point down to two agrees. Be jews, it lowers it to 12. You cannot just throw be jews. What about a snowplow on the streets of new york city. That is an alternative. What about actually throwing down gravel . You live down out in the suburbs. I have been ordered not to shovel my driveway by my wife. The first day we moved out there, 12 years ago, i went out for a snowstorm and shoveled and she said to get in. If i moved to the suburbs, he would be out there. It is a whole business, a whole economy of guys who go around with their plows and they are good. Those guys are spreading gravel. Out in the brook, where we go shooting a lot. Gravel more than salt. Qwest they have gravel roads. A lot of dirt roads. You basically take a combination of dirt and sand and makes a little oil and press it down. You did not know i knew this much about roads. He is the infrastructure king. If you want to know about roads, he is the man to go to. The reason is he loves the equipment with with which you make roads. You put a pad under a horseshoe to protect horseshoe. Getting to rock salt, there are five. I mentioned the largest accounting for almost half, 12. 2 million. We consume 35 million in this country. You can see cargo. A concentrated industry. He is a rockstar. In ireland, you should go to the salt mines. Aboutknows quite a bit perfumes. Our chief economics editor here at Bloomberg Television. We have the initial jobless and spirit how is the weather affecting those numbers you requested does not appear to be affecting the numbers. A slight rise. More than expected. We are still in the range we have been in. Just noise. We have had a lot of holidays in recent weeks. Things are going p