Shale pioneer and Chesapeake Energy cofounder Aubrey Mcclendon has been killed in a car crash in oklahoma city. A day after being charged with rigging bids for oil and gas. Mcclendon denied with working and i do working with an unidentified rival to keep rates low. Those are the headlines. 2400 journalists, 150 bureaus. Lets take a look at the markets. Hong kong and china lunch. Heres how they were trading this morning. Shanghai in the green. Singapore, tokyo, and mumbai seeing, all in the green. 1. 8 . Back in half an hour. Time for bloomberg west. Emily im emily chang this is , bloomberg west. The battle for encryption intensifies. We speak to apples attorney. Yahoo meets. Pushing for a sale. Well bring you the latest. Can Cable Companies spend their more subscribers . The arms race for original content is officially on. The debate over privacy rages, first, from capitol hill to the rsa conference right here in san francisco, pitting individual privacy against National Security, striking at the heart of the current debate. How much does encryption hinder Law Enforcement . Joining me now in the studio former u. S. Secretary of , homeland security, michael chertoff. Also coauthor of the usa patriot act. Thank you. Its great to have you here on the show. First of all, look. Apple has been very public about its views on encryption. How much does apple compared to the rest of Silicon Valley . Are all of these other Tech Companies taking as aggressive a stance . Because it doesnt seem like they are. Michael chertoff a number of companies have filed briefs in support of apple in the case. Apple is the first one that got caught up in the battle in a court context. Apple has traditionally been focused more on security and encryption of data that it holds, rather than a Business Model that involves looking at the data and using it for marketing or other purposes. But i think basically all the , Tech Companies are in the same boat. Its not just a question of privacy that question of security. If you force people to create backdoors or duplicate keys, you are creating security vulnerabilities that are going to hurt innocent people. That is really what i think is the heart of this. Emily you have a new white paper out about the impact of encryption on Law Enforcement. What do you make of the argument that phones cant become a warrant proof space in america . Michael chertoff Law Enforcement has a very important job to do. I was part of it for many years. They want to have as much of an opportunity to collect information as they can. But you know, our system in this country does put restrictions on Law Enforcement even when it means you lose a little bit of evidence. In this case there are many , tools that are available to Law Enforcement. Including metadata. Records of who calls who and who communicates with who, which are very helpful in identifying people that might be a threat. The issue here is whether the marginal benefit of handing handicapping and encryption for the fact that we are putting millions of innocent people at risk for criminals or foreign powers to get their data and misuse it. Emily is it . Michael in the long run, strategically, it is to the benefit of the people this of this country to trust the internet. It is important to allow us to build more secure communications, better encryption, and reduce vulnerabilities so bad people dont get our stuff. Emily should there be any warrant proof devices . Michael chertoff it is not that they are legally warrant proof. If you want to design a system that is simply not accessible except by those who send and receive messages, i think there is real value in that. That may incidentally preventer prevent Law Enforcement from getting out information. The fact that we dont have a perpetual recording device in our houses that would make it easier for Law Enforcement, like in 1984, means we are balancing personal security and privacy against other issues. Emily i spoke with attorney general Loretta Lynch yesterday. Explained what the government is asking apple to do. Take a listen. Loretta lynch if there was a box of documents in someones house that i could show a court may have evidence of a crime and the lock on the door was such that i needed to help i needed help to get in, i needed someone to help me, essentially, so i could get in without the documents selfdestructing that , is what were asking apple to do. Dont run in and get it for us. Dont take that risk. Dont pull them out yourselves. Do what you did for years until about a year ago and help us with this particular matter. Emily is that how encryption really works . Michael chertoff the analogy is misplaced. This is not a case of, help us pick a particular lock. This is about building a master key that would open every lock. Over thehing all country. And then, hold the key, recognizing that we have held,enced when a key is someone can steal it and use it to break into other peoples houses. That is what the issue is. It is not a oneoff. Emily you believe that is the only technical way to do this . Michael chertoff there may be ways outside my engineering experience. In this case, i think the government is trying to prove a point. It is part of a larger debate whether we should promote innovation in the area of security and encryption. I think we have to. Emily cyrus vance the new York District attorney testified on capitol hill. On the side of the government. He had this to say. Cyrus vance criminals know that the ios operating system is warranted. Thisnals understand that new operating system provides them with a cloak of secrecy, and they are, ladies and gentlemen, quite literally, laughing at us. Emily is that happening . Reality is, even if you had a rule that requires all American Companies to provide a backdoor, there are apps overseas that will be impermeable. They are going to find ways to avoid the Law Enforcement. In the old days when we had wiretaps you know what criminals did . They walked out of the building and they walked around the block and they had their conversation out of earshot. This is an issue with lawenforcement always deals with. You dont have perfect visibility. But somehow we managed to make these cases again and again. We did it that way the old days and they can do it that way now. Emily today, google chairman eric schmidt was appointed head of a pentagon advisory board, which is interesting and almost seems contradictory, given the stance that google is supposedly taking in support of apple. What do you make of this . Michael chertoff it is actually very smart move. They do set up these advisory panels. There is a defense science board, a policy board. They bring in people with different experiences and different points of view. This is the same type of issue. You are bringing in people who understand modern technology and how it develops. You are getting the benefit of their expertise. I think that is a good way for the government keep the door open to the Tech Community. Emily michael chertoff, former secretary of homeland security, thank you so much. Now, facebook, the latest tech company under investigation in europe. German Authorities Say the social network may have abused its market dominance. Forcing users to agree to its terms on how their data is used. Amazon and google are already being investigated in europe. This is for anticompetitive behavior. German Officials Say they have been in touch with their european counterparts regarding this probe as well. I want to bring in sarah frier. Sarah, what can you tell us . Sarah it is important to put this in context. Facebook has had runins with privacy issues during the whole existence of the social network. The terms of service, whether it is facebook or apple or google, nobody reads through the whole thing. What the germans are saying here is, by being a monopoly power here, and having the terms of service that people may not understand fully what happens to their data, it might be illegal. Of course, Facebook Says , andthing is totally legal they are giving people options with their front with their privacy. But facebook give so much data to advertisers without the ,xplicit consent of their users and that is what worries german authorities. Facebook has so Many Companies that have come under scrutiny in europe. This is facebooks year to be targeted. Emily talk about facebooks stance on encryption. I understand whatsapp messages are encrypted. Mark zuckerberg has come out in support of apple. How far is facebook willing to go . Are they willing to go as far as apple . Sarah i dont think your facebook account is quite like your iphone. It is something where much of what you do is public, much of what you do is communications with another person. People are not storing documents on facebook. They are not doing much that is hidden. They are messaging, so that is part of it. It could be hidden, as it is in was able but facebook to cooperate with authorities on San Bernardino with my without much of an issue. Emily sara, thank you. Coming up, Major Internet Companies from google to uber are lining up in support of apples stance on encryption. When push comes to shove who is , going to go as far as tim cook has . We will ask the head of the Internet Association. Our wideranging interview with apple attorney ted olson. Why he believes this is a civil rights violation. Emily a story we are watching, reports out that yahoo is taking a meeting next week with the activist investor pushing for a sale of the company. Several reports say yahoo is ready to discuss a deal. It is asking potential buyers to sign confidentiality agreements. Well keep you uptodate on all these developments as they arrive. Turning back to the top story, the ongoing fight between apple and the u. S. Government over encryption. Yesterday we heard the two sides make their case before lawmakers on capitol hill. Heres what to watch next. The Tech Community has until midnight on thursday to file amicus briefs on behalf of apple. On the 10th, the governments response is due. Apple has until five days later to respond to that. On march 22, the two sides finally have it out in a Court Hearing about whether or not apple must comply with the request to unlock the phone of one of the San Bernardino shooters. By the way, apple is planning a major product unveiling this month. Some are reporting it could be the day before the hearing. First, the amicus brief deadline. The Internet Association is one of several organizations backing apple. The group speaks for major tech heavyweights including google and uber and amazon. Earlier today, i asked internet and show she asian ceo associations ceo, how united these companies are in support of apple. The principal for the internet industry is the you cant have the government Compelling Companies to create a vulnerability in their system. All these companies rely on strong encryption to protect their users. To protect our infrastructure. And even protect our National Security and allowing vulnerability that is being pushed for the government will pushed for by the government will make us all less safe and less secure. It is important that we stand up and make sure that encryption is maintained for the National Security of our country. Doly yet, these companies vastly different things. If the government were asking it for data from pandora or netflix would not be a different story . Every company has a bit of a different Business Model. The companies do work with Law Enforcement closely under the law. The key point is under the law. In this case the warrants that , were issued for apple were done so under a statute that was written in the 1700s that predates even the Fourth Amendment to our constitution. Many legal experts dont think that was a legal way to go about the warrant, and it is Compelling Companies to write technology that would undermine their own products, and their own services in a way that weakens protections for users. Emily you think they will be willing to go as far as tim cook . Tim cook can defend apple. Im speaking for Internet Companies. Apple is not a member of our association. We see this as a conversation that is much broader than one iphone. The former director of the nsa and general hayden has been saying that encryption is a fundamental part of our National Security. We have to remember that. By creating backdoor vulnerabilities in the system , which this would do and clearly would do going forward, makes us all less safe, and is something we need to make sure that we are voicing our concerns and making sure the right answer happens at the end of the day. Emily on the one hand you have , to Tech Companies distancing themselves from the government. The other, eric schmidt is now the chair of a pentagon advisory board. That seems contradictory. What message does it send . I do not know if it is contradictory. But there needs to be a recognition of the Important RoleTech Companies play in our National Security safety. And our Law Enforcement agencies do a terrific job keeping us safe and lay an Important Role in our society. Both sides need to Work Together and have some appreciation for the role that each of them plays. It needs to be done under the law. We are seeing the beginning of a dialogue that i hope will get us to Solutions Rather than having kneejerk reactions are having this solved by a warrant that came out from a 1700s statute that no longer applies. Emily it seems that google has may in particular be taking a different position. We have seen tweets from the ceo of google, his personal twitter, but we havent seen anything from larry page or anything from the google blog. Is google in a different position . I dont think so. The Internet Association is filing an amicus brief on the side of apple and googles ceo had tweeted on the same side as apple and the rest of the internet industry. It is a very complicated issue. I think it is getting a little heated. It is not the case that every single executive needs to tweet about it. The positions of the Internet Companies have been clear and will continue to be clear. Emily i am told that android phones are easier to hack. Plain and simple. Does google plan on making its operating system is difficult to access as apple . Security is essential. That is what you seal the Internet Companies, google included, coming out in favor of strong encryption, because it does protect users but also protect National Security. There will be difference between what an iphone and an android look like, but the principle is the same. Strong encryption to protect infrastructure and our Financial System and National Security. Emily some social Media Companies have been asked to police themselves and take down accounts that could be linked to terrorists. Is that fair . Social Media Companies have gone above and beyond in helping Law Enforcement under the law. But also, theyve taken the initiative to take down accounts that are terrorist related. They have been on the front lines of creating counter speech that has gone incredibly far in fighting back isis and terrorist organizations. They are partners and they are doing serious work to make sure terrorism is being fought around the world. Michael beckerman, thank you. Coming up netflixs massive , programming budget is setting off an arms race for cable giants. What investors stand to lose. Emily if you are a millennial, verizon and hearst may have something for you. The companies are striking a deal to develop content for smart phones. Two channels will launch this spring. Rated red. Com will feature Lifestyle Content aimed at young People Living in red states. Seriously. Tv is a comedy news network. The channels will be distributed across verizons mobile network. Financial terms were not disclosed. Media companies have a new strategy to combat declining viewership at the tv networks. Spend, spend, spend. Years ago coming Cable Companies could keep viewers with reruns, but not anymore. Netflix is spending nearly 5 billion to turn out original content. Sparking a sort of arms race with the other Media Companies. Here now to break it down our , Bloomberg News media reporter , lucas shaw. Talk to us abou