There is caution on rising Interest Rates. Heres Morgan Stanley senior economist allens at an are on the Interest Rate debate. Economist allens aetna on the recent Interest Rate debate. You run the risk of choking off an early economic expansion. The fed should delay a rate increase and raise rates more sharply. The u. S. May cut off more russian banks from the local financial system, because russia said they should ease support from separatist rebels in eastern ukraine. It was relatively calm in the conflict zone. Three soldiers were killed in the past day. Sales of the iphone and ipad blocked. Seven new Patent Infringement lawsuits against apple in federal court. And they are asking the ftc to block products including iphones. The company sued each other after talks for a new failed. And republican president ial hopefuls are making their case of a Political Action conference. Former Texas Governor rick perry and donald trump. The republicans have to toughen up. They have to toughen up on the irs. If they have to toughen up on benghazi. They have to toughen up on everything and perhaps other than immigration they have to toughen up on obama care, which is a told a lie and a total complete disaster. We have total and complete coverage on bloomberg politics. Congress may be close to avoiding a partial shutdown in the department of Homeland Security but only temporarily. Technology is caught on the crossfire. Peter cook is on the hills with the latest. What is the latest on a temporary fix. Theres a lot of pressure not to get this done. It has been a moving target all day. House republicans agreed to today bring to the floor current levels for three weeks. The whole reason for this holdup in the first place. They gave the greenlight for suffrage for a separate funding bill. No mention of the immigration executive action. A change of dual strategies for Mitch Mcconnell and john boehner. Democrats are saying anything other than full funding for this agency is a mistake. It means no new contracts are going to be out there, even if we have this temporary continuing resolution. No grants for things like Cyber Security at the local level. The key to securing our borders is technology. This does not allow us to employee to deploy the same kind of technology for a safer country. What he is talking about his new investments in cameras and aerial surveillance of the border. A lot of this comes down to technology. Even if we have a temporary solution there is a question about whether or not that investment would be made and bolster border security. Thank you very much. Interesting stuff indeed. What happens in three weeks . Do we go through this whole exercise again . We are not certain there will be the foes to do that today. They could be a couple of other issues that get lumped in here. No real doubt about the fact that republicans and democrats support funding the department of Homeland Security immigration issue holding them up. Even as this gets delayed for three weeks. Covering the politics. We appreciate it. What about what the dhs actually does in the Cyber Security. What would a potential shutdown mean to online threats . Joining us from detroit, mark weatherford, further deputy undersecretary. What does this mean . I dont think there is going to be any Immediate Impact to the operations and the ability of dhs to respond to cyber events. Most of the Cyber Security personnel within the organization will be deemed essential personnel and will continue on. In the immediate future there wont be any impact operation. Where there will be some impact is some of the more structural issues like a couple of large programs. There are large programs that are in various stages of implementation across both the federal government and working with private industry that will be impacted immediately. Tell me what dhs doesnt Cyber Security. What this dhs to . The Integration Center is the focal point for the federal government working with the private industry. The umbrella underneath the end kick is the u. S. Cert organization. These are mechanical organizations working with not just the private sector but with the government as well. They are doing the daily operations, the daily intake and output of Cyber Security information, working with Critical Infrastructure sectors to provide them foam or ability information they are receiving. And to aggregated together and disseminated out to the appropriate parties. In other words, at dhs there is an organization that tries to find out every cyber threat as it is happening and making sure anyone who could be affected in government or beyond government knows about it. That is exactly right. That doesnt so much of the that should stop, thats is like something that is important. It is important. That organization is not going to be affected in the shortterm. Where there could be some impact is in the morale and people aspect of this. Asthe important point is we spent a lot of time recruiting and cultivating the talented people that work in this organization. There is going to be an incredible amount of pressure on them, working on an environment where some of our peers are going to be sent home. It would seem there is no hotter employment dealing now that Cyber Security. Some government workers are probably not making top dollar. Now you had not a excess dental threat. What does it do to have these threatened shutdowns . Its terrible. I can tell you that all of the defense contractors and private Sector Companies around the country are salivating at this. I cannot name one Single Company that i that that i work on with a daily basis. This is a Good Opportunity for people to pluck out these workers that are unhappy with the environment. There are going to be some employees that are going to be sent home. They are not just going to be sitting around and waiting for the call for the government. They are looking for a job. That is going to exacerbate the problem. They will have to go out and rerecruit four. Send your resumes. We appreciate it. Bloomberg west will be right back. This is bloomberg west. Here are some top headlines. A fourmonth extension of the rollout. The vote was overwhelming 54232. 29 of the no votes came from Angela Merkels own party, showing signs of growing discontent with the greek bailouts. Managers of the Worlds Largest hedge fund is turning to Artificial Intelligence for even bigger returns. Bridgewater associates is starting an artificial intelligent unit. The team will develop algorithms. After heading up ibms watson unit. Some sad news to report Leonard Nimoy has died at the age of 83. He became one of the most famous characters ever in television. He died from chronic pulmonary disease. Turning now to Net Neutrality we yesterdays Landmark Communications was a big deal. Debating scottish dress colors. Passing monumental proposal to regulate the internet. The wild west days of unregulated net are over. One of the commissioners that voted against this one of the republicans that did vote no joining us. Title ii now reigns. What is the first pernicious thing we are going to see because of title ii . Decisions about how the internet is going to work will now be made by engineers and technologists and be made by lawyers and bureaucrats. Consumers are going to see their broadband bills go up. The fcc is going to tfa proposal. And we delete providers are going to see their state and property and other taxes go up. Those are going to be proposed on consumers as well. The wallet will feel the pinch first. The tax bill is a separate thing from title ii. The regulations themselves are going to be very farreaching if and when the fcc releases the plan. Some of the media immediate effects are going to be severe as well. You have been carting around the proposal. What is it that is really worry some . The extent to which they are inserting themselves into every aspect of how the internet works. Net neutrality was meant to encompass the relationship between Internet Service provider and a customer, the last mile connectivity. This document through a narrow majority approved yesterday goes before goes far beyond that, relegating the nuts and bolts of the internet. Even Service Plans that wireless broadband providers may offer. There is still a lot of uncertainty about how these rules will be applied. The leadership was asked how this internet conduct rule is meant to cover any how will that work . He said, we dont really know. The fcc will be able to sit there is a referee and throw the flag. That doesnt give the industry a lot of certainty. One of the interesting things we talked about this endlessly. When i think about forbearance is, the fcc is sort of seeing sort of saying trust us. Is that a good thing or a bad thing you go it is a bad thing. Some of the forbearance of the fcc grants is hedged with the classic washington caveats. That is prequel comfort for innovators in this space. Moreover it is nominally granted. It is forbearance in name only. There is still this heavyhanded backstop which is a little arcane. The fcc is going to implement the forbearance will fade over time as the regulations ratchet up. Lets talk about the issues of Net Neutrality. Netflix has complained they were compelled to play fast lane. They were thrilled they will have to they wont have to make those payments area that seems like a compelling argument. It is compelling on the surface. It is going to be worse off for everybody, for edge providers and isps. The fcc doesnt have the expertise to determine what agreements the isps region terms of Internet Connection of interconnection. Do you want an unelected bureaucracy to make decisions about how the internet functions . Do you want to rely on the light touch regulation in the last 20 years that allows Companies Like netflix to grow tremendously and reach commercial agreements that both sides can ultimately live with. I would rather have a free market approach as opposed to having a washington bureaucracy make some of those decisions. Title ii has some interesting hair on it in addition to the transit rules. Things like privacy have specific title ii requirements. I wonder what that means for a company like google. It is a big business that involves mining customer data. I wonder if those rules will now mean that google has to abide by different privacy rules . This is why Tech Companies that have been pushing for a title need to be careful what they wish for. Having classified Internet Access as a title ii service and treated the entire internet as utilities one part of the title ii is section 42 section 22. Not just the isps but the edge providers themselves to adhere to some of the more onerous privacy restrictions. Over time we will see whether or not the administration and the fcc chooses to go down that path. That is one of the many examples of pandoras box that has been opened thanks to title ii. This conversation is really good. I want to talk about municipal broadband rules and other important things the fcc did. We will talk about that right after this break. You guys yesterday that state laws into places should be overturned or get an exemption come in chattanooga and wilsonville north carolina, to offer broadband. Is there actual competition in the world of broadband . I think one of the reasons we object to this in particular is strictly a legal one. I dont take a view on any given municipal broadband project. Other people say it displaces private investment. I step away from the entire debate. I am servicing on the question that was before the fcc. Does the fcc have the legal power to block state laws regarding municipal broadband. I say the answer is no. I have seen statistics that say 75 of americans have only one choice when it comes to broadband. That is going to be a big issue in a lot of places. This is why i say instead of focusing on Net Neutrality should focus on broadband competition. Ironically enough title ii will drive competition out of the marketplace. We have heard of from thousands of other companies who say the title ii is a tremendous mistake and they dont have the resources to comply with these regulations. If we approach some of these smaller providers out of the marketplace we are going have fewer choices for consumers. So it is a problem. It needs to be solved but the way is to solve it the way to solve it is through market relations. The merger is pending before us i cant comment on how it will proceed. Generally speaking a lot of people are interested because of that reason. Thank you for coming on the show. Former aig ceo robert been much a died robert been russia Robert Benmosche died at 87. He made the announcement his successor would be coming up sooner than anticipated. Aig said under his leadership aig paved america in full. A profit of 23 billion. Diplomatic talks between the u. S. And cuba resume today. John kerry says the decision the decision is separate from talks to normalize relations from the two countries. Cuba wants to be removed from that terrorism list first. Priceline has named a new ceo of priceline. Com. Chris soderbergh comes chairman. Additions to the portfolio including the purchase of the restaurant Renovation Service opentable. French media conglomerate is planning to return 6. 4 billion dollars to shareholders through dividends and buybacks. The company has unloaded 30 billion in assets, including two wireless carriers. They profit nearly quadruple the profit nearly quadrupled in the fourth corner. That fourth quarter. This comes a week after apologizing including adware on laptop adware on laptops. They will offer effective losers a free six month subscription to antivirus services. And the u. S. Loses oil rates for the 12th consecutive week. Rates fell by 43 last week in their lowest level since 2011. Heading for their second straight week of losses. Happy house of cards friday. Pop some popcorn the season three is out tomorrow. The hit drama that has attracted a lot of attention and gave us the notion of Binge Watching how do you end up watching this thing . What does it mean for bottom line for netflix is bottom line . Joining us is paul sweeney. You love the show, we love the show. We are overpaid white guys in a particular demographic. We dont have real rating numbers for this. Netflix does not release ratings for individual shows. The only thing that investors know is the company has been pretty clear that some of the original program like house of cards has driven subsite driven subscriber growth. They feel confident their investment in original programming resulted in growth of subscribers, which is the lifeblood of their business. More subscribers allow them to even invest allow them to invest even more in original programming. They need to be big players in original programming. There was a group called Civic Science that try to put some numbers to it. They said there are 14 million users, which is a quarter of netflixs overall audience. In terms of how netflix is changed Business Model in offering second runs to offering original content. Netflix when hbo came in to the market 20 years ago it was simply a place to see movies after they came out of the theater. You go back 10 years ago hbo started investing in its own original programming, like the sopranos. I think netflix the growth of hbo. I think netflix new all along they could not a rebroadcaster of movies and tv shows. That maintains a large part of the total viewership area in an effort to differentiate themselves in an increasingly competitive video market they needed to create their own original programming. Find something they can brand a little bit. They have had a couple of successes here. They are no different than any other creative entity. It had a successful profitable business. Netflix did not. It is a principal driver of subscriber growth. What happens when house of cards is over and the flops start to happen . Its hard to pick hits. It certainly is. They have driven a business. Netflix does have a very Large Library of movies and tv shows, which continues to drive subscribers and continues to drive the amount of time spent with netflix by its users. Clearly they are lining their stars with more original programming, which just heightens the whole programming risk to the netflix story, which wasnt there in the early years. Particularly if they can own the programming that is on netflix. They do not own house of cards. Thats a big deal. People think they own it. The fcc fines that the rights of it would go back to the producers after a little bit of time. There are certain markets internationally where they do not have the ability to show house of cards. Most importantly it allows it allows longterm syndication rights over other different distribution that forms. Much like the big Hollywood Studios make money on the tail end. What we are seeing is netflix is getting increasingly into original programming. They are one of the most important buyers in hollywood today. The chief content officer at netflix is one of the most widely accepted people in hollywood, because yesterday checkbook. He is willing to write some checks for original programming. Are you going to Binge Watching this weekend . Im going to get started here. I know there is a lot of pent up demand from netflix subscribers. Thank you very much. Bloomberg west will be righ