Replacement. The Trump Administration took a big step towards voiding obama era Net Neutrality regulations. The current sec chairman announced tuesday he plans to hold a vote on overturning the protections. The regulations are intended to prevent broadband providers from favoring their Business Partners offerings or their own video and other content. The fcc would require that all Internet Service providers be transparent about their Business Practices if they are blocking or throttling content. They have to disclose that, and we make clear that the federal trade commission would have authority to police broadband providers if they are behaving in an anticompetitive way. Through those two rules, we would be able to protect consumers Going Forward and promote investment in networks that are necessary to promote digital opportunity. Emily we caught up with a man who led the fcc during the Obama Administration when those protections were instituted, tom wheeler. Mr. Wheeler transparency is the solution, so all that is necessary to do something evil is to tell you that im about to do something evil. That does not make any sense. Then what do you do once you have that information . 2 3 of the households in america have no other choice as to where they are going to get their internet, so this is to go out and claim that somehow this is some kind of Consumer Protection is a fraudulent representation. Emily they say their proposal is more fair, more proconsumer. What makes you think it is the opposite . Mr. Wheeler in the name of Consumer Protection, they are not going to protect consumers. Commissioner mcsweeney this afternoon tweeted that even if they turn it over to the ftc, they do not have any authority. They are just running away from their responsibilities. Emily the big concern is how this impacts the haves and havenots, the folks who could increase future innovation, be responsible for future innovation. How would this impact the haves of the moment, googles, facebooks, netflix . Mr. Wheeler i think the big thing is how it affects everybody and their ability to get on the internet and for consumers to reach providers and providers to reach consumers. What were seeing here is the cableization of the internet. If you like your Cable Company in the way they choose which channels you can see and the way they continue to increase your prices, you will love what happens under this repeal because suddenly, the people making the rules are the networks, and the consumers cannot survive without the networks, and the Service Providers cannot survive without the networks. Emily how can we hold isps accountable . Mr. Wheeler that is what we did in our open internet rule. No blocking, no throttling, no paid prioritization. You have to provide information to the consumer, and we will put a referee on the field to look at what your continued actions are as Technology Evolves and throw the flag if necessary. What the trump fcc is doing is just turning its back and walking away and giving the Network Companies everything that they have asked for. Emily this is unfolding against very interesting political backdrops. We mentioned earlier what is going on with at t costs proposed merger, with time warner, the doj now suing at t. How much of this is politically motivated . Mr. Wheeler i cannot answer that question. I do find it shocking that the trump fcc from day one has gone right down the line for what the Big Companies want when they are supposed to be representing consumers, not the companies, and the fcc continually turns their back on their congressional mandate to protect consumers. Emily by all accounts, it appears this will happen in december. For you, what is it like to watch your work be undone . Mr. Wheeler [chuckles] i have had better thanksgivings. No, i think the answer there is that this is a long process. Yes, it appears as though they have the votes to overturn it in december. Then it will be up to the court. The decision we made twice went through the court and was twice affirmed by the court, and i hope that the court will look at this and say, hey, wait a minute this has been in effect for two and a half years, and there have not been bad things that resulted. Why are they turning around and going the other direction . Emily that was the former fcc chairman, tom wheeler. Lets get the other side, the former republican fcc commissioner who served under both president s bush and obama and joined us right after wheeler in support of a rollback. Mr. Mcdowell we are going back to where things were in 2015 and what is being put back into place is clintongore administration policy. The internet ecosphere, i think we can all agree, was exploding beautifully before 2015, before these old 1934 rules under the 1934 Communications Act was put on Broadband Internet access. You have section two of the clayton act, section seven of the clayton act, actually. You have a lot of protections. The terms of service with each broadband Internet Service provider, which is a contract with consumers if they were to discriminate in a way that harms consumers, there would be an avalanche of lawsuits, for instance. There are so many protections that were already in place in 2015 before the single title two was imposed into the internet ecosphere, so it is actually going to be just fine. The sky is not falling. There is not going to be some internet dystopia coming. Its going to be the same place better place, actually, as we look to invest 300 billion in new mobile technology that we will need over the next decade, to have america continue to lead the world in wireless and really wire up the internet of things. Its going to be a great decade coming up. Emily we just got a question from a viewer who asks quite plainly how this actually helps consumers. Mr. Mcdowell since 2015, we have seen a stutter step in investment in broadband networks. A number of studies and market analyses suggest that capex has been curtailed in this space because as you had in a previous segment, the sword of damocles of rate regulation was swinging over isps, so title two was created for the ma bell monopoly. The fcc with this bottleneck all of a sudden for innovation and experimentation in the marketplace. Keep in mind, by the way, that over 90 of consumers have a choice of 4 mobile broadband providers. Speeds are much faster than dsl or cable modem speeds were, and they will be 100 times faster after we wirelessly connect with 5g the internet of things, so its going to be a wonderful time. Emily how do we hold isps accountable when this is mostly honorsystembased . Mr. Mcdowell there are many laws in effect here. What prevented them prior to 2015 from behaving in an anticompetitive way that harms consumers . The section five federal trade commission act, the clayton act, but also economic incentives. You have a competitive marketplace for broadband, and it is primarily mobile broadband. We see cord cutting and cord shaving. You have market pressure, and you had other laws already on the books prior to 2015 that protected consumers, protected entrepreneurs, protected investors, and it gave us this great internet ecosphere that we enjoy today, so it is a myth. Emily we have also been talking about the doj suing at t over its attempt to acquire time warner. With tom wheeler, we talked about how much of all of these issues are politically motivated. Im curious for your thoughts on that. Mr. Mcdowell i worked on a lot of these deals, and we worked closely with the department of justice and the federal trade commission on these deals. What we are seeing is a reinvention of antitrust law or an attempt to do so with this complaint. There is a reason the government has not challenged a vertical deal where a distributor is buying a supplier in nearly half a century. That is because they tend to fail or there is no competitive harm. Right now, the jurisprudence, the case law is really stacked against the government. The government has the burden of proof here, and we are going to see an interesting case. Get the popcorn out because there are two have companies in america that know the most about antitrust laws. Exxon, the old standard oil, and ma bell, at t. At t was willing to go to court for a horizontal merger where they were buying a competitor. They are more than willing to go to court and win. The government has a huge burden to overcome and would really be creating a new precedent as they try to argue in court. Emily that was former fcc commissioner robert mcdowell. Coming up, ubers new ceo finds himself an apology mode again. This is bloomberg. Emily this week, we learned uber covered up a massive hack attack affecting 57 million accounts. In 2016, hackers stole the data of 50 million riders and 7 million drivers. The company kept the breach concealed for a year. This week, the company ousted two executives for their roles in keeping the hack under wraps. Rather than report the breach, uber paid the hackers to delete the information. Eric more than a year ago, uber heard from the attackers they found a way to get names, telephone numbers, that sort of information on 50 million riders and 7 million drivers. Most importantly, drivers license numbers for 600,000 drivers. That is information that uber was required to disclose and did not. More than a year later with a new ceo, the company is deciding to come forward and say that they should have disclosed this information, and here is what happened. Emily hes telling you this should have happened, he will not make excuses, and they are changing the way they do business. Uber has been negotiating with regulators for a long time. What makes them think they could get away with Something Like this . Eric while they were talking to the federal trade commission and just after negotiations with the new York Attorney general, they faced the question of what to do about this hacking. Its hard to imagine this engenders any sort of trust with regulators. You already saw in the instance in london where regulators revoked their license that part of the issue was a just did not trust uber and that the company had not really represented very clearly what has gone on. This is another sign that uber is willing to go to Great Lengths to hide information that it believes it was required to report to regulators. That will give cities, states, and National Governments all over the world serious pause. Emily how can we be sure this information did not get into anyone elses hands and that the hackers did delete this information . Eric right. Ubers belief is they did pay the 100,000. They had evidence that the files were actually deleted. We do not know who the hackers were, but they refer to them as these two individuals. Right now, there is a belief that that information is not out there in the public, and uber is offering Data Protection for the drivers affected by the most serious information breach. Emily what did the former ceo know and when did he know it . Eric always a good question. A lot of this falls to their chief security officer. He was ousted. He knew the company had been negotiating with the Attorney Generals Office in new york and the ftc. There are questions about how much he knew, the legal reasoning and legal obligations behind the decision, but he certainly knew about the hack and the scrutiny uber faced. Emily what kind of penalty could uber face some sort of consequences from regulators, could they be hit with a lawsuit in fact . Eric anything is possible. As we reported before, uber faces ongoing criminal probes that have touched at least five different areas. This is a company that over time regulators and Law Enforcement officials are looking at, and there are dozens of lawsuits against uber, so it would not be surprising that Something Like that could happen, but i think we have to wait and see what the actual consequence is, but you have to imagine a some sort of monitor or attempt to make sure that uber is doing what it says is doing is something regulators or Law Enforcement will be thinking about after these revelations. Emily i know it may be hard to keep track of all the open investigations, but what do we know about the status of those and if we are likely to see any kind of penalty . Eric we have not heard a lot since my big story last month saying that there were these five investigations. One interesting fact is that joe sullivan, who has been ousted as part of this incident, was at the center, or at least his organization was at the center of some of those things. You hear about greyball, the software meant to help in some cases drivers evade Law Enforcement. That was something sullivans team was responsible for and something investigators have looked at and may still be looking at. There are so many questions and the ceo has to keep playing cleanup, and he knew that was what he was coming into. Maybe he did not know quite the extent of it. This one, the data breach, is a total surprise. Emily tesla is spending an average of 8,000 per minute as it ramps up production on its model 3 sedan, which would put the company on track to exhaust its current cash pile by early august, so the pace is not expected to continue. Tesla has said it has ample money to meet its target of producing 5000 model 3s by the end of march. Coming up, the doj is hitting at t hard. Details on the lawsuit that could block at ts 85 billion takeover. Emily big news for tencent, the tech giant has become the First Chinese government to revalue net more than 500 billion dollars. This just three months after it top 400 billion for the first time ever. It joins apple, alphabet, amazon, microsoft, and facebook is the only companies valued at more than 500 billion. We got exclusive access to its workshop and drone testing grounds. Tom mackenzie reports. Tom the drudgery of your daily commute could be near an end if these taxi drone makers get their way. We have the permits and our taxi drones will be seen flying in dubai and other places publicly. Tom where do you see the biggest opportunities publicly . Definitely commercial use and human carrying drones. Were only at the beginning stages of largescale usage of drones. The passenger drones had just come to the attention of the public and our company has just shifted our attention from technology to the commercial side as we see huge opportunities in the global market. Tom is the biggest challenge the regulatory market . Is that still the number one obstacle you have to get over . The Civil Aviation authority in uae and china have given us the green light for testing. In china, the u. S. , and many other places, policy makers have put us in the center, working closely with us every day on regulation. This is already very unusual. Tom is china your prime focus or are you looking overseas as well for sales . The overseas market is indeed bigger than the Chinese Market in terms of purchasing ability. However, we are making our way in china. For example, we signed deals with two local governments and helped them build control centers like this one for them to use our drones extensively in areas such as urban control and environmental monitoring. I expect passenger drones to bring us much more income next year. We have already secured a 1 billion order from an American Company and formed a strategic partnership. The passenger drone will become a star in 2018. Tom you received 52 million in funding. Are you still looking for investment . Regarding 300 million u. S. Dollars as we start mass production of our passenger drones at the beginning of next year. We also plan to install fully Automated Production lines to enlarge production capacity. Furthermore, we will sign deals in saudi arabia, singapore, and several european sites where we will need funding to support drone tests. Tom they are also putting their delivery drones through their paces. If regulators give the start up the green light, it will take off. Emily still ahead, the Justice Department has filed suit to stop at ts takeover of time warner, and President Trump had this to say about the deal im not going to get involved in litigation, but personally, i always felt that was a deal not good for the country. I think your pricing is going to go up. I think its not good for the country, but i will not get involved in litigation. Emily more on that story ahead. This is bloomberg. Emily welcome back to the best of Bloomberg Technology. I am emily chang. At t is telling the Trump Administration we will see you in court. The u. S. Justice department the 85d it is suing billion takeover of time warner. Randall stephenson says it stretches the idea of antitrust beyond the breaking point and is vowing not to sell cnn to a pc administration. Appease the administration. This deals a major blow to the bid to create a media and telecommunications empire. We listened in on the doj call and we were joined after by our reporters. They said is illegal, harmful to consumers. Their rationale is it is a vertical merger, but they are saying this concentrates too much power in the hands of one company, in this case at t. It gives at t too much clout to contente who gets prioritize its own stuff through , time warner, so it is really interesting and almost unheard of case for the doj to come out against what doesnt at least on paper look like a pure vertical merger. Emily in the weeks leading up him taking over the position at the Justice Department it , look like everything was moving forward. Is this politically motivated . Does this have to do with the president s dislike of cnn . Cory there has been some reporting saying this did come from the staff and not the