But theres only one film out of all the films nominated for best picture that has any romance in it. Rose max levchin and the oscars when we continue. Funding for charlie rose is provided by the following captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose we begin this evening with our continuing coverage of the encryption debate. On thursday apple hit back at the f. B. I. With a 36page legal brief. Microsoft, google, twitter, facebook and yahoo also moved to throw their support behind apple in court. F. B. I. Director james comey testifying before Congress Called encryption the hardest problem ive seen in government. Joining us max levchin, cofounder of paypal, chairman of yelp and board of directors at yahoo and c. E. O. And director of a firm of financial technology. Weve seen this coming. Yep. Rose tell me more. So if youll dial history back, you will see even the current director comey has advocated many times in speeches and interviews for essentially backdooring Encryption Software that is built into various Software Systems from apple to other operating systems. That was a very black and white and fairly easy issue. Thats a terrible idea. There are two simple things to it. One is bad guys dont have to abide by our laws. The good guys will weaken encryption, and bad guys will use the strongest thing they can get their hands on. Well be worse off, they will be better off, bad idea. Thats easy. Rose bad guys can be criminals, nation states . Whoever. Everyone will have knowledge we purposely weakened our systems and enacted laws presumably to make sure everyone here uses the weakened systems. You can make the argument they will be safeguarded and Legal Protections around them but weve seen what happened with the breakins from target to the government breakin in the last couple of years. Security is either there or not. Even if its slightly weakened, it basically doesnt exist. This particular case is not exactly the same thing. This one is a subtle, different thing, and here the government has asked apple to not just hand over some data that they happen to have. What theyre saying, is yes, we know you dont have this data. We want you to build some software that opens up this phone and gives this data to us because we want to investigate a known terrorist, obviously a very bad guy. Rose and they say its one time only. We only want to do this one time, and they say were not trying to open a backdoor, we deliberately are not trying. So weve got a problem with how people interpret key words backdoor, one time only, precedent. Yes, unfortunately, reality is that this is a very complex issue and people very often dont understand the subtleties and conflict the general encryption issue and this particular issue. This one is a precedent real issue that apple and f. B. I. Are now digging out. Ruse why is that true . Because the software can be built. Apple doesnt have it. They can sit down and build it. It will be complex, it will be a burden, but they can do it. The thing that tim cook is saying, if the f. B. I. Can compel me to build software that basically opens up phones of my customers, they wont stop with the this one. Rose stopping there would be naive. Apple says we can build software to open a phone up. F. B. I. Says, okay, open this phone up with the software you build but then destroy the software. Were not asking you to do anything else with it, we just wanted access to this one phone. Im keeping over here for a moment the idea someone else may come and say, ahha, i know you destroyed that but do it for us because we have a case of a mass murderer and if we can get inside his phone, it will tell us stuff about what he did. Right and the perhaps more scary wrinkle is they open up the phone, say we have a case and real probable cause and a very scary thing going on, what we needed to do is turn on cameras on every laptop out there, or on every phone or rose theyre not saying that. No, theyre not, but what apple is saying is if there is precedent where a Government Organization comes in and tells them build software to do effectively spying on our own citizens, whos to say it wont happen again and again and gets broader and broader. The answer is its fine, you can compel us to do this, but it has to be out in the open and a law that says this is how it goes down. Rose this is the perfect case to decide a a Supreme Court decision or b a congressional law . Right. And one more thing thats worth considering and understanding here. Beyond just legal precedent, what apple is not saying because it would be, i think, a p. R. Disaster, but its a very real concern is should we build the tool and the tool exists for a brief moment in time. Its a company for several hundred thousand employees. There will be people involved in this. The tool is pretty terrifying. It will exist for a time, but it will exist. Whos to say that as the world knows this tool is being built, you dont have every imaginable bad actor saying well do whatever it takes to get our hands on that tool because as soon as we do, we, not our government, some other government, some other agency, some other mafia grabbing this tool while its in existence, pocketing it and using it for their own purposes and devices, i think apple wants a legal hearing that says this tool must exist under the following framework of law and thats how usage of this tool can or cant happen. Rose apple doesnt want the responsibility without somebody having said these are the rules, this is how well do it and these are the guide reasons and everybody understand that . I believe thats the purpose, obviously not authorized to speak on behalf of anyone other than myself. Rose i asked you to come and be because you know Silicon Valley very well and you understand Computer Science very well, you spent your life there. That puts you in a very different place than me. I only have my curiosity to guide me here. So then do back to this one phone. Do we wait until it works its way through the courts . That may take a year. Do we wait before for this National Debate to take place and may or may not have congressional legislation . What happens in the meantime to the phone that has information because we know what the people were and what they were doing, that might lead us to other plots against america . So this is where my emotional parenthusbandfamilypersonsef and my Civil Liberties personpublicself conflict. I ultimately hope this propels its way to the Supreme Court very quickly and the Supreme Court actually tells apple you are compelled to open this phone up. I personal want to see this case in front of the f. B. I. With every bit of evidence so that they have access to whatever information they need to make sure my kids are safe. Rose right. I think that is fundamentally very, very important to me. Rose and to most parents. I hope so. On the other hand, i think it is absolutely critical that it is in fact the Supreme Court that says, for this one phone, you are compelled to open and, incidentally, we have a four against four court so doesnt set precedent. So this ruling happens at a particularly curious time, the precedent will not be set. The court can compel apple to open this one phone, then it still goes in front of congress and we still have the public debate and fundamentally decide what its going to be, what checks and balances will be. Do we have every bad guys phone opened up by Supreme Court . A little burdensome on the Supreme Court but that would ensure our civil liberty. Rose when you look at apple doing this, they have announce order has been reported that they are developing devices, iphones, future iphones that will even be harder to crack. Thats going to make it more difficult. Yes. Rose they say almost impossible for them to penetrate. Yeah. Rose you would know more about that than i would. What happens in the future to the need of Law Enforcement to have access to Critical Data . The Civil Liberties case is often having to do with individuals right for privacy. It clearly was raised after Edward Snowden in terms of people who might not have known their phone was being metadata was being collected and all that stuff and may have known about the transactions of people but may not necessarily have had a reason to know. But Law Enforcement has a legitimate purpose in america in any society and that moans they ought to be able to now, there are constitutional restrictions and has to do with due process and the 14th amendment and everything else, but Law Enforcement has the responsibility to do as much as it could and were putting a ceiling here, and is there any way and shouldnt there be a way for society to develop laws that will say, yes, we know Law Enforcement has this need, but they have to check off here and here and here before they can do it, rather than saying under no circumstances can they do it because we can develop in todays Technology Ways that they can never do it . So i think apples not sure its been announced but certainly debated a plan to build something thats effectively unbreakable is actually the right thing to do. I think it is most certainly the case that people that are trying to safeguard themselves on apple or microsoft or vipir or any device have access both bad and good guys to software that is in fact unbreakable. So someone who is absolutely keen on protecting their data knows how to do so and will do so. There are many vulnerabilities that happen within systems and have little to do with the math and encryption, theyre just implementation problems and bugs and socalled exploits and thats what the f. B. I. , n. S. A. And c. I. A. Have used successfully over the years and that practice will remain, and that is not something that any one of us needs to worry about. Thats the spy craft of the agencies. The notion of compelling a company to do something that fundamentally puts them into a very conflicted situation that apple finds themselves in now is completely side stepped by not allowing this weakness to happen. What this weakness will cause rose apple does not want this decision . Correct. They do not want to be the company deciding what level of privacy they can guarantee their users. But i think whats really important again is the point that, if you weaken the system, the bad guys are generally not going to be affected. The good guys will be affected. Apple says the same strength applies to everyone, the same level of protection applies to everyone and were telling you what it is is generally a better outcome. There will be difficulties but n. S. A. Was the prism being outlawed many years ago. Everyone was beating the drum of, oh, no, now the bad guys well never read the bad guys mail. It appears that we have not been that much weaker even though the prison system was im sorry, the clipper chip is the debate im referring to. Clipper chip was a notion of a backdoor chip that would go into computers and the n. S. A. Would have everything and eventually it got blown up because Civil Liberties protested it and it was eliminated. Rose where are Civil Liberties when the f. B. I. Or Law Enforcement goes to a bank and says we have a search warrant to look at the financial records of this person, we have gone through the proper procedure to get it and heres the search warrant, show it to us. In the past, they have done it. Yep. Rose theyve given the information because there was a search warrant. Mmhmm. Rose also, a problem that they may not have control of it. I think thats actually unlikely to change. I think thats both lawful and good, certainly during the years i many times dealt with people who came and said we need to see records of certain tractions because there is a real risk here when we were looking at financial crime. As a financial institution, you are audit, required to keep certain types of records, there is the and thetymoney laundering law, all of that works fine today, i think were in a good place there and dont need to change anything. I think whats special about this case is the request or demand to write software because that creates a precedent that software can do anything. Software can turn on your microphone, can listen to your phone calls. If apple can be told, hey, you need to do that rose is there a problem being asked to do something . To build something. Rose theyre asking them to create. Or to hand over data they have. The apple is in possession of data, there is precedent where court order is given to the agency and the data is something that must be handed over and has been done in the past and apple has worked with Law Enforcement agencies plenty of times. This is fundamentally new way of doing this. Rose james said yesterday, the code the judge directed apple to write works only on this one phone so the idea of it getting out into the wild and working on my or your phone, at least th the experts tell me, is not a real thing. James comey, director of the f. B. I. With all due respect to the director of the f. B. I. , i think between him and the judge there is probably many layers of indirection or explanation of how good it actually works. Its certainly possible to write code that works on one phone. Is it closer to write code that works on any phone . Yes. Its fundamentally a check on a phone that it works. Rose could the smartest hacker in the world break into this phone without damaging the data inside . You know, the knee jerk reaction is no, but it might not be so because ios is built by humans. There are bugs in it. It is plausible that there is a bug that even apple doesnt know about that a very smart hacker already knows about or could drive to do this bypassing apples involvement. The straightforward, not necessarily easy way, you build a new version of ios, eliminate the check around the pin trials and software elimination to have the key, you need apples help to do this. But could a resource eliminate the tamperproof chip . It might be they might destroy the chip in the process but that doesnt require help. They can get in and get the key. Rose it says something to me that almost everybody among the Major Companies and Major Players in Silicon Valley are supportive of apple to one degree or the other. I think what all tim cooks peers rose were talking about google, c. E. O. Of microsoft, were talking about these are companies that deal in customer data. What i think theyre fundamentally saying is this is a hugely important matter, uncharted legal territory. We fully support tim cooks leadership in asking congress to create the law that draws a clear line in the sand. Dwoa this with a court we do this with a court order and these are the checks and balances and this is how the data is discoverable and this is how it is not, completely out in the public so its clear to american people, when theyre buying their device and subscribing to a service, what will and will not end up in the hands of the government under certain circumstances. So i think everyone is on the right side of the debate in terms of what is important to them as private citizens but they understand the longterm implications are very profound and we owe it to ourselves. Rose there is no question that the iphone 6, now i assume 7 is right around the corner probably. Rose yes, for sure. That when tim cook makes the point that if, in fact, there is a precedent set here, that a lot of people trusted apple knowing and believing they were buying an encrypted phone and, in fact, it goes to the heart of apples credibility if they are not getting a phone free of encryption or encrypted, and especially in china, which has become their big market. Right. There is salary piece of this that is very relevant internationally and in china, particularly where presumably an entirely different type of due process, an entirely different level of Legal Framework applies, and apple has to be an international company, it has to cater to everyone in the world and they have to have some sort of clear set of standards. I suspect that plays into it. My guess is that, in this case, tim cook is fundamentally concerned with the u. S. Side of the argument but it cannot escape this is something that will have rerp cautions worldwide. Rose and you said you believe there is a way not to have a master key but do this one time, and you supported Law Enforcement, but youve changed your mind. Bwas there one particular thing that changed your mind . Was it tim cooks argument with david muirer that the president was involved here and it would do damage to the idea of privacy . There was a thing he said in the interview that set off my mind from the bath of going bad guys phones need to be cracked open, dont care about anything else, to my view today, he mentioned congress and this notion of checks and balances, notion of accountability in Law Enforcement is something our congress is fundamentally in charge of and not having them involved is what ultimately made me think, you know, this is fairly fundamental. This is something where a brandnew level, a brandnew type of access is being discussed and we have no precedent, we have no law around it. So i think thats what got me thinking about this. Rose tim also on this show made the point that we need a dialogue, a conversation, decisionmaking, you know, and this is one of those issues that maybe, maybe all the amount of Law Enforcement and the f. B. I. Working with apple would not have gotten to a solution. You really needed congress to come to grips with it, representing the people, and you feed the Supreme Court representing another branch of government to do it, that the hopedfor idea because they have been talking about encryption. The conversation between apple and the government has been going on for several years, at least, and especially when apple announc