He writes in an oped at wired magazine online, im submitting to my colleagues the strongest open internet protections ever proposed by the fcc. These enforceable rules will ban paid prioritization and the blocking and throttling of lawful content and services. I propose to fully apply for the First Time Ever those bright line rules to mobile broad band. I spoke with chris lewis and doug break. Not a lot of big surprising news, but i must say that i think it is a disappointing move. It is largely an overblown response into a narrow question of what sort of Legal Authority that at the need to police the open internet. I am disappointed. You are disappointed because they are trying to change what disappoints you about it . Title two, there are all sorts of legal entities we crossed into. A big part of the open question is how the fcc will do the forbearance process . There are provisions of title two that just about everyone agrees are outdated and unnecessary. Give me one example. They were written when people were using homing pigeons to communicate. What is outdated about this . There are a number of things. The loop on bundling and those sorts of provisions that were put in place in the 96 telecom act for what were then regional monopoly telephone providers. Just about everyone agrees those sorts of regulations are not appropriate in the broadband market today. How exactly the fcc goes about forbearing is a big question and there is tension in justifying the need or title two, apart from whether it is justified at all. There is tension between the forbearance findings and the change in classification to a telecommunications service. Chris lewis, just about everyone agrees that it will not work. Are you just about everyone . No, i definitely do not agree with that. What i think everyone can agree on is that neutrality protections are important. The question before the fcc is how you put those into action. We support chairman wheelers decision to use title two, because in 2010, the fcc tried to enact Net Neutrality rules and have it struck down by the court. In that decision, the court basically said the rules were too close to title two type or commentary rules. By chairman wheeler putting out a proposal that uses title two and make them more likely they will pass court muster. We think it is a historic decision and are very supportive of him moving forward. I get the idea that the fcc needs title two. They cant just make laws. Do you think that is the best way to make sure things that go across the cable modem are unhindered by the Cable Company itself . Chris . Yes, we think it is the strongest rules the fcc has at their disposal. Congress could always update the telecommunications act. There is talk of doing that. That process takes time. Consumers have been without Net Neutrality protections for over a year now. We are very supportive of them moving forward now, and then if congress chooses to clarify things, we would hope they would do it in a way that would protect the Net Neutrality principles and empowers the fcc to do it job as a cop on the beat for Internet Service providers. It sounds like this is the best tool they have got. Tell me one negative impact that could come in this room is what it sounds and is implemented. I think the biggest negative impact is it has a lot of litigation risk. It will likely be overturned on appeal. I do not think it is likely to stick. It has always been fundamentally a fight over the jurisdiction the fcc has to police these networks. There is not a lot of strong disagreement over what Net Neutrality itself should look like, but the fcc jurisdiction. I think we should go to congress and get it clarified once and get this fight settled once and for all. Doug brake and chris lewis. What they are thinking in washington, we now know, but what does Silicon Valley have to say about this . Here is a big tech lobbyist, Internet Association ceo michael beckerman. What we asked for is that there is no blocking, so any website you want to visit, as long as it is legal, you can get there. There is no throttling, meaning that your Cable Company cant degrade some of the content of the video site you want to visit. There is no discrimination. At the end of the day, Internet Users should be able to access whatever website they want and internet startups should be able to reach their customers. I always use the examples of uber and lyft. They are both supporting the Internet Association. Wheat if this makeup fantasy Cable Company, mr. Byrns cable acquires lyft and suddenly slows down all of the uber requests and the uber business disappears and lyft is the only option for a ride and they cant get to customers as quickly as everybody else . Yeah, under Net Neutrality that would be prevented and competition is what is allowed the internet to flourish and become what it is today. You have Companies Like lyft and uber that can compete. The isp should not decide who wins and who loses. Netflix shares sold off with this news. I wonder if it is because people say wow, these guys have open themselves up to more competition. Why do the Big Companies support the open internet when they are the ones who have the advantage because they can build their own Networks Like google has or apple and they can do other things like pay for it as netflix has. All of our Member Companies have thrived and we look at what makes the internet great. It is the idea of Free Enterprise and let the users decide, and frankly, our companies are much closer than any other company or industry you are looking at. They care about their users and let them decide who will win and who will lose in their happy to have that fight. Is it a cost concern as well . Netflix has spent tens of millions to pay to get their content faster to customers, faster than their competitors even. I dont think so. I think it is just an issue of fairness, and you do not want to have a chokepoint anywhere in the network. When you have your customers you want to reach your customers and have them reach you and not have an isp or some other middlemen in the middle taking a toll or blocking or degrading content michael beckerman, the ceo of the tech lobbying group, the Internet Association. Dish network uses loopholes to pay less than the billions it bid on some valuable airways. Did this cross the line or outsmart competition . That debate is next. This is best of bloomberg west. Im cory johnson. Well, the largest spectrum auction in u. S. History, 45 billion in bids is on the books. One big winner, dish network grabbing 13. 3 billion worth of airwaves, trailing only at t in the auction. Here is the controversy. Dish is a big business with 14 billion in annual sales, but in this auction it used loop holes to get a Small Business price break in the auction. They claimed 3 billion in discounts. A republican fcc commissioner is livid and demanding an investigation. And a Program Director for the Media Group Common cause also joined us for this discussion. The results of the auction were amazing. They showed once again that Consumers Want and need better wireless connectivity. Its too early to say exactly what to make of the winning bidder. What matters is whether and how they put to use the spectrum licenses they have won. It should be noted that dish has a lot of spectrum they have won before and not put to use. When you look at their use of this loophole to qualify as a Small Business partnering with entities but owning 85 of these companies, could you see this coming . I certainly did not see it coming to this extent. I dont think anybody else did either. I think that is part of what is generating such outrage. It is in front of the fccs integrity. Dish claiming 3 billion worth of discounts makes a mockery of the entire program. Yeah, what was the purpose of that program . What was it intended to do . Originally congress directed the fcc to set up a program to help small entrepreneurs get a foothold in the wireless industry, and engage in what is called facilitiesbased competition, using spectrum that they get at auction, building out a network, and providing enduser service. But what has happened now is the fcc has loosened the rules over the years so much that we get a situation in which the big sophisticated corporate interest can gain the system and use these shell corporations in order to get multibilliondollar discounts. I think that is wrong, as a commissioner and taxpayer. The notion was to help Small Businesses to help competition to help women and minorities. Dish is none of that. Our policy should be facilitating market entry, and we are always glad to see new Small Business, new, diverse femaleowned firms entering the market. Im glad to hear more about facilitiesbased competition. There are all sorts of steps the fcc can be taking to improve that, including by relaxing or preempting bad legislation in the states, preempts communities ability to build their own broadband networks. They could put a stop to the comcast time warner merger. Theres lots on the menu for the commission to do to really ensure that we have marketplace full of options with lots of entrepreneurship. That those issues, todd, what is common causes take on dish using a Small Business loophole to win these auctions . To be clear, we support using designated entities to enter the marketplace and receive bidding discounts. What really matters is from our perspective, on the back end what is a clear timeline for them using these licenses and entering the market . I want to read from the letter he wrote to the rest of the fcc. I think it is really powerful. You wrote, quote, we must change course, and soon, by closing loopholes that allow big business is to rip off the American People to the tune of billions of dollars. The American People should be outraged about this. I certainly am. Youre a commissioner of the fcc. What can you do about this now that the horse is already out the barn door . It is incumbent on a fcc to do a full and thorough investigation into these particular applications. The integrity of the designated Entity Program is at stake. If it turns out that the scandal is what is legal under our rules, it is incumbent upon the agency to reform the rules to close these loopholes. I would note that i dissented last year from a number of proposals to loosen the rules even further. I predicted almost exactly this result, corporate interests would find ways to arbitrage the system and game it at the expense of the american taxpayer. My only regret is i turned out to be right. Why do you think the other fcc commissioners went for this . They support some of the same goals. Is this about maximizing revenue and letting the biggest bidders win in the interests of competitive entrants, women and minorities be damned . You would need to speak to them. We seem to share the same goals of having a Small Business program that works. The question is, are you willing to take on the efforts to reform the program to ensure that Small Businesses benefit . That is where we have seen division. I hope this current episode will inspire the fcc to take action to ensure that those who claim the bidding credits are the women and minorities who historically have not had a chance to break into this marketplace. Those are the people we should be looking out for. Not the fortune 500 corporations that can go to wall street to raise capital for these auctions on their own. Todd, if theres one rule change that has to be made before the next auction, what do you think that should be, todd . The best steps they fcc could take for the next auction are ensuring set aside reserve spectrum for the smaller competitors to ensure we dont have yet another situation where all of the scarce public resource end it is up concentrated in the hands of the big two, verizon and at t. Lets make sure theyre going to smaller players, entrance and upstarts. From selfdriving cars to the rise of Ridesharing Companies technology is transforming transportation. What will commuting look like in 30 years . Im going to talk to transportation secretary anthony foxx, next. Im cory johnson. This is the best of bloomberg west. Here are some stories that made headlines in technology over the past week. The accused mastermind of the drug dealing website is facing life behind bars. He was convicted on all seven charges. Prosecutors said he ran a 1. 2 billion Online Empire selling illicit goods and tried to arrange the murder of five people who threatened the anonymity. Microsoft cofounder bill gates donated 1. 5 billion worth of microsoft stock. 31 million shares went to an unknown entity back in november. He has cut his stake in microsoft to just 3 . Gates now has 99 million fewer shares than his successor at microsoft, ceo steve ballmer. The fight is on between google and uber. Uber has partnered with Carnegie Mellon to work on selfdriving cars. Meanwhile, persons familiar with the model said google is working on its Ride Sharing Service which will incorporate selfdriving car technology. Speaking of google, i went to their headquarters in mountain view, california, to check out the latest selfdriving car prototype and talk about the potential of the technology with the u. S. Transportation secretary, anthony foxx. He was at google for a town hall to talk about the governments report about the future of transportation in america what the next 30 years might look like. Take a listen. The problem were having with transportation is were looking at what is in front of us rather than what is way in front of us, because what is way in front of us will be more impactful in terms of defining our future if we are not careful, so we would like to be in the position of defining our future rather than letting it defined by things that will make it worse for us. So what is the biggest, sort of most difficult trend you feel like the current planning is not addressing . I would say there are two things. One is that their funding approach is not budgeting towards outcomes. If we want to have travel times reduced over the next 30 years it is going to mean investing at a much higher level than we are doing today. Across the board, not just the federal government, but state and local governments. Secondly, on policy, it is not just a question of having more money. It is also how that money is being spent, so looking at the mix of Transportation Needs that we have as a country, between highways and transit and rail, both passenger and freight, we have got some significant challenges at levels about what will optimize us in the next 30 years read we will have to break down some silos to do it. Fundamental changes. You have got millennials not consuming or owning as many cars, doing things like uber using public transit, moving to urban areas, and then the growth in urban areas and the urbanization in america at a level we have not seen in 150 years. It is really interesting to see the growth of metro areas. These are areas that you know, usually there is a city in the core and a suburban ring around the core, and there is a rural ring around that, and that is what we are referring to. People might be thinking of preindustrial areas like new york city, boston, san francisco. But you are talking about places like charlotte and albuquerque. Yes, a wider swath, and it is moving west into the areas like you are talking about, so it is not just the big cities. It is also the mediumsized cities across the country. So are selfdriving cars an answer to this or are they just another problem dealing with the issues that are already out there . There is a lot of promise with the self driving cars, on the safety side with accidents and for consumers, and the challenge were going to have is developing regulatory systems and processes and policies that are more adaptive and flexible that can actually take a brandnew technology and be able to assess it correctly and help the manufacturing get into the marketplace. We interview the ceos of uber and lyft on our show quite a bit, and they talk about winning to approach the regulatory hurdles in their businesses at the local level. They can overcome the local level, but they cannot do it at the federal level. What are the biggest federal issues that Companies Like uber and left have to conquer . They are in a different category, because many of the regulatory systems that basically govern Taxi Companies where there are most of the conflicts, are at the state and local level. There is very little that the federal government has there. But i do think the federal government has an interest in, for example, ensuring that the service that is being done by, for example, somebody who is driving a uber car, we do have an interest in making sure that that person has been background checked and things like that so that folks can be assured that they are going to get where they are going. So are you thinking that if the local authorities do not take care of this, the federal government might have to . Im saying that i believe we have a role to play in urging states towards that. Im not necessarily suggesting that we should pass laws that do that at the federal level, but i do think that is an area that state and local governments are going to have to address. While you were talking about uber and lyft, Bloomberg News was breaking a story that google is about to get into the business of competing with uber. Google has raised a lot of privacy concerns at the federal level. Do you s