A couple of questions that are important to dig into when you look at these numbers. The question of course what happened with u. S. Production, just under that level last week. Three weeks of declines in a row. We want to see if that continues. We did have the comments from the uae oil minister saying that oil prices are going to force production freezes. Thats a jab at iran here. A couple of reasons that you could see support for these. Back to you. Thank you for that. Its 8 00 a. M. At apple headquaters. Its 11 00 a. M. On wall street and squawk alley is live. Good thursday morning. Welcome to squawk alley. And along with Business Insider ceo. Its good to have you back. And its google ceo supporting inkripgs on a series of tweets. We build secure products to keep your Information Safe and we give Law Enforcement access today at a based on valid legal orders but thats wholly different than requiring companies to enable hacking of customer devices and data. This has been kicked around for 24 hours now. Youre not with the Tech Community on this one. This is a very, very important precedent. And its great that were having a National Debate about it. The other troubling precedent here, now given the encryption on all the phones and devices, effectively anybody can communicate in secret all the time, do everything and Law Enforcement will have no way at getting at that information and as a listen to the arguments coming out of Silicon Valley everybody wants to protect privacy thats great but we want a society with powerful Law Enforcement where you can do things with wiretaps and car drive seizures and subpoenaing Important Information with court orders which by the way all these companies are providing without argument except in this new case where it come do you understand to unlocking a single dead masked murderers phone. Its a very complex issue but its very important. If Silicon Valley wins this one. Law enforcement is going to be severely weakened as is national security. Do you think theres a chance that apple wins this though . Despite the fact that a judge has now made this order and is coming from the fbi. The director of which is the former deputy general and the Southern District you would think that the fbi would not push for something that it didnt think or believe was legal. You would also think that a Great American company would follow the law. Theyre choosing to fight it in this case. All they can say is you are the most powerful and Richest Company in the world. If anybody can take on the fbi and the law here and tie it up for many years or ultimately win it is apple. Makes samsung look like childs play. Its a very important fight. We have been hearing so much about the privacy side. Folks have to understand the Law Enforcement side. Weve had centuries of when you get a court order you can go in and do things like tap phones and so forth. You draw the parallel to wiretaps. Thats the point in a sense is that given existing technology or tools or information yes. We turn it over. Asking us to create something or modify something, when does that end. Next time around what can they ask a Technology Company to actively do. Getting to the details very quickly, hard to sort it out you can imagine a system that you have to be able to open somebodys phone. The stuff is not encrypted. You can see it when the phone is running and thats what the fbi is asking or just to open the phone so we can see what the messages are. Thats it. Its still remarkable to me that the support of tim cook is still hedged. He uses words like could and probably and and theres no full throated response to Silicon Valley from a unified group of ceos and companies saying heres what we think should happen. Its more were not comfortable with what the government is asking and i think its not good if youre in apples position and its a court order asking you to open up something to create software that, in fact, hacks yourself. Its something that is so secure. Apple is presenting it as something totally new. We just created the soft mary thats totally new. Also by the way says couldnt agree more with everything apple said in their customer letter today. Theres a spectrum of opinion out of the valley. That was more full throated and not the ceo of a Public Company owned by facebook. The further you get east, the more practical and more real world things get when it comes to national security. This was a bad position for apple to be in because this is a terrorist. Theres information on the phone. They have to figure this out. They can win in maybe the specific case but i dont know if society is. Well revisit this later on. On a proposal to swap their cable boxes for cheaper devices and apps to boost competition. It would let people get Video Services from apple or google for cable and satellite providers. There would be a period of public comment. Why are you looking at me like that. The last issue is complicated and you can have passionate views on both sides and theres logic. This one is black and white. It is a no brainer. Of course you should be allowed to put your own box on. They have this one totally right. Of course the cable industry is coming to say we want to maintain our choke hold on all the money and profit and we want to do everything we can to lobby and protect our money and greed and all of that stuff. Who do you call for help when its not working. Call the person that made the box. Thats fine. We deal with that every day. With your router for your internet connection. Of course were owned by comcast. Its the one company that i own stock in is comcast but whats right for the consumer to open this up. It is so much better for the consumer. Its that simple. You get innovation. You know how much better that is than the old cable boxes. Imagine if that were more competition and more ideas flowing through. Should innovation be mandatory . Playing devils advocate here . Yes. Consumer choice. Who would adisagree with that . All the money they plowed into the box as we know it today, just wasted . Wasted billions of dollars of years, cash flow. Things dont necessarily have to last forever just because you start a business. This is good for consumers. Its black and white. Comcast box that i use at home is good. It got me to ditch the tivo box that i talked about on the program but i would ditch the x1 if somebody else comes out with something better. I want that to happen. It can be software and apple can have it so your cable box is on everything. Its super easy. Where ever you are you watch. So forth. Its great for consumers. No argument here. By the way, a lot more on this story still to come tomorrow. Well talk with fcc commissioner about this issue and a lot of the other things facing the fcc. Another shake up at yahoo . The company says its phasing out 7 digital magazines as the company set to lay off 15 of its staff. As Marissa Meyer is set to speak in a little under 2 hours from now. Josh is there with more. Good morning, josh. Good morning, carl. So listen we know Marissa Meyer dedicated time and resources to building out this portfolio of digital magazines but now she has taken it to that division so yahoo food, health, makers, parenting, travel, autos and real estate they will all be shutdown and more high profile exits including bobby brown that is the editor and chief of yahoo beauty and yahoo s top tech editor, yahoo will now focus on news, sports, finance and life style and its going to be up to Martha Nelson that runs yahoo s Media Organization to make this slim down business work. Why these changes . Well, financial analysts say they look to be trying to streamline costs and make yahoo a more attractive acquisition target and thats true in the face of renewed activist investors reportedly taking at least initial steps to a proxy fight and this all coming as user me tricks are showing real weakness. The information citing confidential data says the number of people visiting yahoo s three most important products. So thats mail, the homepage search on a daily basis has really declined meaningfully over the past year. The homepage for example and the first period 2015. Time is now really of the essence if yahoo was going to find a buyer. Marissa is going to take the stage here in a couple of it. Were going to find out if she addresses any of the recent changes. Thank you. What does it mean when you close so many like theyre doing . Stepping back it is good to experiment when an experiment isnt working you have to move on. So you can say they tried some things that didnt work and theyre focussing on whats working. Thats smart. You should do that and a lot of people in the Digital Industry when they launch magazines. Not a digital concept. Not a physical world so folks arent surprised by this but the idea that theyre trying things and of course correcting and Going Forward is good. But you launched a tech vertical in essence while theyre shutting one down. Do you think this is about pr programattic advertising and now you dont have to do that. And why is it going to them. Two big challenges. Its direct big premium deals to programatic and their business is changing and theyre losing a lot of revenues even though theyre captioning programatic and now you can audience target effectively so still now and for many, many years to come, clients, advertisers. And they care that its premium and not junk that theyre going to be embarrassed by and so forth and now subject matter and i think the product here is too small. Real niche. Very, very small. And very, very large tech sites. You can reach a much larger audience that way. Theyre doubling down on streaming and im wondering when you look at these changes is it too early to make the call whether theyre slimming down for the longterm or dressing up for sale . I think they given the interest in the company and given the pressure they have to be thinking about at least taking these offers seriously. And yahoo still is a very valuable platform. Its a billion uniques every month. Still can generate a lot of cash. And cuts in cost. And they have to consider that. Natural buyers in your view. Urging very smart the more leverage they have. The way the Digital World is evolving now it is google and facebook and other. And everybody else is in that other category. And hopefully if you want to keep pressure on google and facebook but right now its Google Facebook and other. We covered a lot of ground. As always. Thanks a lot. Quick news alert for you. Phil is in chicago with that this morning. The dot is out with its report on Airline Service not only for december but for all of 2015 and for all of last year. Here were the Top Five Airlines in terms of on time arrivals. We get this question all the time. And followed by alaska air. Delta airline was the third on time airline last year. Who were the worst . The worst, frontier, right behind envoy. And there you have jet blue. Jet blue being the third worst. By the way, 79. 9 of the flights were on time here in the united states. Good news and bad news for passengers. A lower percentage of mishandled bags and lower percentage bumped from overbooked flights. Bad news people are not as happy when theyre flying. There is an increase in the number of complaints filed by passengers with the dot last year. Guys back to you. Thanks so much. Lets get a quick check on the markets. Were back in negative territory after the crude build we got at the top of the hour. Take a look at the dow down by a fraction of 1 . S p 50 down by 7 points. Nasdaq down by 30 but theres two dow stocks moving in opposite directions. Shares of walmart and Fourth Quarter estimates. Revenue forecasts for the rest of fiscal 17 which they are now in and you can see that stock is down more than 4 but shares of ibm are rallying after getting upgraded at morgan stanley. Theyre rallying 5. 5 after the firm says theres considerable upside for ibm with the Company Building confidence in return to revenue growth. That would be a long time coming. Ibms watson unit announcing a Health Care Analytics firm for 2. 6 billion. Plenty more on apples fight against the federal government. A former executive at apple will join us with his take plus the head of espn leaving the door open at the mobile conference. Well take you there live and shares of marriott are down after Revenue Misses estimates. The ceo will join us in a cnbc exclusive in just a few minutes. Back to apples high stakes fight against the fbi and court order to unlock a phone used by the San Bernardino gunmen. Theyre arguing it could set a dangerous industry wide precedent. When does customer and data privacy trump safety . Joining us is tech veteran and former Vice President at apple. Now president and ceo at 3vr. Thank you for joining us, al. Hi, how are you doing . Do you see this the way that tim cook does . And what do you think is the best solution here . I read tims letter and tim is a very smart guy and i absolutely believe every word he put in that letter and agree with a lot of it. I think though its really questions were being posed with and theres a shortterm question. What do we do about San Bernardino and the larger question is what do we do about the devices in general going into the future . There is a solution to the shortterm but it starts opening up the pandoras box that tim is concerned about. Do you think that the solution for the shortterm is have apple open up this phone, not give the code to the feds but now every country for various reasons is going to be handing phones to apple saying can you open this for me . They might. Let me give you an example. If you read his letter carefully i was intrigued about not only what was said but what wasnt said. He was very explicit about we dont have that code available today. However he didnt say we couldnt build it. I suspect they could build a code. So if you need to let code be built let apple own it. Put it in a clean room somewhere and if a court federal judge orders an apple device to be opened have the fed show up and go in the room and do it and make that the littleation. Now the slippery slope now that technology would exist and, you know, how do you stop people from asking for it . Thats where the slippery slope begins and im sure thats their concern. Is there anyway that the company can guarentee that this would only be a one off situation . Theres been a lot of arguments that this is a very old 5c model and they could write a code for an old device that excludes the newer devices. It sounds simple in theory but were not the experts here. Is that possible . These guys are smart and i expect they could. The only way that i can see that apple would ever get comfortable doing Something Like that is they have to own that and make sure that it never leaves the walls of their headquaters. We talk about the company. I wonder what do you think the level of debate is within the company on this one . And this is a time. Its not the first time that technology and privacy have come and created problems. This has been going on since the 1400s. The difference today though is theres a huge safety factor behind it so theres the potential that lives will get cost on the other end of that decision. It seems like eventually this gets to the question of should Consumer Devices be inherently compromised when it comes to security or should the manufacturer hold a master key. Tim cook saying absolutely not. Privacy is paramount and the government wants there to be cases in which they can get access to information no matter what. I dont know how they legislate that given that third parties overseas can create encrypted software. Is that what this is really about . Yeah. And quite frankly its going to be carried on to society for sometime. Ill be blunt. When the idea of a threat seems abstract and not very likely were all going to be thinking that privacy is most important. But should another event or Something Like a 9 11 or worse happens i think society will move the other way. Look at london. They had the bombing back in the early 90s and they rolled out Video Surveillance and became one of the most surveilled cities in the world. Thats when the public said were willing to deal with that if we want to be safe. Unfortuna unfortunately we may have to endure one of those events before we make that decision. Thanks for joining us. Thanks for having me guys. Appreciate it. Up next, interesting comments on streaming from the head of espn at this years code of mobile conference. Well go there live for details when we come back. Its not your standard family situation. Just me. Me and my four daughters. Ah, theres a lot of dancing and pageants that go on in our kitchens and living rooms and things like that. Ive had to learn to accept certain things like the fact that my toe nails and finger nails are going to be painted constantly. But its really awesome to watch them at their own things. Theyre great kids. All of them. Whatever home means to you, well help you find it. Zillow. Welcome back. At re codes code Media Conference the question is how companies are adapting to the landscape. An important question for espn. Julia has the details. Thats right. Espns president says hes in talks with a range of new potential partners including the likes of apple and amazon to include espn in their new bundles that could be in the works. In the meantime hes already working on direct to consumer options. We are certainly interested in pursuing our opportunities and have already. We sold the world cup of cricket last year over the top. 100,000 subscripti