1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg P and L 6 00:00:20,840 --> 00:00:32,600 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Well, 7 00:00:32,720 --> 00:00:35,720 Speaker 1: the Internet protections that were put in place two years 8 00:00:35,720 --> 00:00:40,520 Speaker 1: ago are now gone after the FCC, the Federal Communications Commission, 9 00:00:40,840 --> 00:00:44,160 Speaker 1: votes to end net neutrality. Here to help us understand 10 00:00:44,200 --> 00:00:47,120 Speaker 1: the topic is David Garretty. He's the chief executive of 11 00:00:47,200 --> 00:00:50,720 Speaker 1: g v A Research. You can follow him on Twitter 12 00:00:50,840 --> 00:00:53,360 Speaker 1: at g v A Research. Also joining us here on 13 00:00:53,400 --> 00:00:55,920 Speaker 1: our eleven three oh studios is June Grosso, are legal 14 00:00:55,960 --> 00:01:00,680 Speaker 1: expert and co host of Politics Policy, Politics, Power, Policy 15 00:01:00,760 --> 00:01:04,479 Speaker 1: and Law and Um June. Maybe just to begin with you, 16 00:01:04,560 --> 00:01:07,720 Speaker 1: One of the things I learned in researching this topic 17 00:01:08,200 --> 00:01:12,000 Speaker 1: is that this goes back to nine because it has 18 00:01:12,040 --> 00:01:16,000 Speaker 1: to do with which federal agency, if any, has jurisdiction 19 00:01:16,240 --> 00:01:20,319 Speaker 1: over what are called broadband providers. And it turned out 20 00:01:20,319 --> 00:01:24,520 Speaker 1: to the FCC thought they had jurisdiction, but maybe they don't. Well, 21 00:01:24,640 --> 00:01:28,080 Speaker 1: the Supreme Court has pretty much taken care of that issue, 22 00:01:28,280 --> 00:01:32,200 Speaker 1: and so now there's a clear authority that the f 23 00:01:32,360 --> 00:01:35,520 Speaker 1: T that the f c C has had the authority 24 00:01:35,600 --> 00:01:38,160 Speaker 1: that it claims it has that So that argument has 25 00:01:38,200 --> 00:01:40,920 Speaker 1: been made, but it's been pretty much taken care of 26 00:01:40,920 --> 00:01:44,480 Speaker 1: by Supreme Court case. David, come on in here. We 27 00:01:44,520 --> 00:01:48,400 Speaker 1: did get this repeal of the net neutrality rules. How 28 00:01:48,440 --> 00:01:51,800 Speaker 1: will A, T and T, Verizon the other big internet 29 00:01:51,840 --> 00:01:54,920 Speaker 1: service providers respond to this? Will they immediately start to 30 00:01:55,320 --> 00:02:00,680 Speaker 1: raise rates for faster internet service? The providers have essentially 31 00:02:00,720 --> 00:02:04,840 Speaker 1: indicated that they're voluntarily um not going to be doing anything. 32 00:02:05,120 --> 00:02:07,200 Speaker 1: But the fact of the matter is is that with 33 00:02:07,320 --> 00:02:10,400 Speaker 1: the repeal of net neutrality, there's been a tremendous transfer 34 00:02:10,440 --> 00:02:13,200 Speaker 1: of power, if you will, from the f CC over 35 00:02:13,280 --> 00:02:17,960 Speaker 1: to the incumbent broadband service providers who control the Internet's infrastructure, 36 00:02:18,080 --> 00:02:22,600 Speaker 1: and it really now is volitional, voluntary on the part 37 00:02:22,720 --> 00:02:25,880 Speaker 1: of these providers to decide what type of pricing they're 38 00:02:25,880 --> 00:02:29,359 Speaker 1: actually going to have. So even though the FCC chairman 39 00:02:29,400 --> 00:02:32,320 Speaker 1: Agic Pie has said, look, you know, net neutrality was 40 00:02:32,360 --> 00:02:35,480 Speaker 1: trying to attack an event that was never going to happen, 41 00:02:35,520 --> 00:02:37,240 Speaker 1: the fact of the matter is is that Pie has 42 00:02:37,280 --> 00:02:40,520 Speaker 1: now opened the door to allow differential pricing. He's now 43 00:02:40,880 --> 00:02:45,120 Speaker 1: opened the door to essentially let these companies charged what 44 00:02:45,160 --> 00:02:49,239 Speaker 1: the traffic will bear, not just on the household consumer side, 45 00:02:49,560 --> 00:02:52,800 Speaker 1: but also on the business side to access to access 46 00:02:52,880 --> 00:02:55,640 Speaker 1: something the Internet, which up until now has been viewed 47 00:02:55,639 --> 00:02:59,959 Speaker 1: as a utility. June has the FCC's decision also open 48 00:03:00,120 --> 00:03:03,079 Speaker 1: the door to lawsuits. It's a question of just how 49 00:03:03,120 --> 00:03:06,480 Speaker 1: many lawsuits. So already we have the New York ag 50 00:03:06,760 --> 00:03:09,520 Speaker 1: Eric Schneiderman announcing within minutes of the decision that he 51 00:03:09,560 --> 00:03:12,720 Speaker 1: was going to lead a multi state lawsuit Washington a 52 00:03:12,919 --> 00:03:17,359 Speaker 1: g Bob ferguson, various public interest groups, public knowledge, free press. 53 00:03:17,360 --> 00:03:20,640 Speaker 1: And there are several different ways and claims that they 54 00:03:20,680 --> 00:03:24,560 Speaker 1: can make due to the way that this was handled. So, David, 55 00:03:24,760 --> 00:03:26,920 Speaker 1: I'm trying to figure out. So they are saying, now 56 00:03:27,120 --> 00:03:30,200 Speaker 1: these big internet service providers they're not going to raise 57 00:03:30,240 --> 00:03:34,639 Speaker 1: prices on a voluntary basis, What will be what will 58 00:03:34,639 --> 00:03:37,560 Speaker 1: it take for them to do so? Number one? Number two, 59 00:03:38,120 --> 00:03:40,800 Speaker 1: who stands to benefit the most and who stands to 60 00:03:40,920 --> 00:03:43,840 Speaker 1: lose the most? Well, I think the first in start 61 00:03:43,840 --> 00:03:46,760 Speaker 1: of the second question, First, which is in those who 62 00:03:46,800 --> 00:03:50,760 Speaker 1: benefit most are those who have and control the infrastructure. 63 00:03:50,880 --> 00:03:53,400 Speaker 1: You know, they now have the ability to you know, 64 00:03:53,520 --> 00:03:58,240 Speaker 1: change pricing in a differential manner. Uh the charge of 65 00:03:58,280 --> 00:04:00,400 Speaker 1: the traffic can bear it certainly argue is that if 66 00:04:00,400 --> 00:04:03,080 Speaker 1: you look at it from return on invested capital basis, 67 00:04:03,440 --> 00:04:07,720 Speaker 1: they have the opportunity now to open optimize profitability um 68 00:04:07,960 --> 00:04:10,680 Speaker 1: in terms of how they're pricing their service. Who loses 69 00:04:10,920 --> 00:04:15,640 Speaker 1: are all the participants, whether consumers on the demand side 70 00:04:16,200 --> 00:04:19,760 Speaker 1: or UH internet based companies on the supply side. In 71 00:04:19,880 --> 00:04:21,720 Speaker 1: terms of who've been feeding the economy? You know, up 72 00:04:21,760 --> 00:04:24,680 Speaker 1: until now, we've seen a gradual process where you know, 73 00:04:24,680 --> 00:04:27,920 Speaker 1: the deployment of the Internet has ultimately been deflationary. Consumers 74 00:04:28,000 --> 00:04:32,120 Speaker 1: became far better at discovering prices, and competitors on the 75 00:04:32,120 --> 00:04:34,919 Speaker 1: margin would come in with more efficient business models and 76 00:04:35,000 --> 00:04:38,080 Speaker 1: serve to reduce prices to consumers. The net net from 77 00:04:38,320 --> 00:04:42,200 Speaker 1: a broad global economy standpoint, the Internet's deployment has been 78 00:04:42,279 --> 00:04:45,920 Speaker 1: ultimately disinflationary, and then as a result, we've been able 79 00:04:45,920 --> 00:04:49,919 Speaker 1: to enjoy economic growth with with less inflationary consequences. June, 80 00:04:50,000 --> 00:04:52,320 Speaker 1: what are the basis for some of the legal challenges 81 00:04:52,360 --> 00:04:56,920 Speaker 1: that will be made. There are several basis is. One 82 00:04:56,920 --> 00:04:59,200 Speaker 1: of the ones that I think is probably the strongest 83 00:04:59,520 --> 00:05:03,200 Speaker 1: is the they failed to follow the proper procedural hurdles 84 00:05:03,200 --> 00:05:06,080 Speaker 1: that they had to go through. And that's relates to 85 00:05:06,080 --> 00:05:09,000 Speaker 1: the millions of public comments, and you heard Eric Schneiderman 86 00:05:09,080 --> 00:05:12,160 Speaker 1: and others saying that they after months of investigation, they 87 00:05:12,200 --> 00:05:15,040 Speaker 1: found that at least two million were fake using the 88 00:05:15,120 --> 00:05:19,880 Speaker 1: identities stolen from Americans, and a few research study also 89 00:05:19,960 --> 00:05:22,640 Speaker 1: found that a lot of them were perhaps filed by bots. 90 00:05:22,680 --> 00:05:26,120 Speaker 1: And what happened is they asked the nineteen state attorney 91 00:05:26,200 --> 00:05:30,000 Speaker 1: generals asked jee Pie to put a hold on the 92 00:05:30,040 --> 00:05:32,880 Speaker 1: on the vote until they could actually look at these comments, 93 00:05:32,920 --> 00:05:36,279 Speaker 1: and he refused. So the question is did he consider 94 00:05:36,360 --> 00:05:39,440 Speaker 1: those comments as he should have? Did? Did the agency 95 00:05:39,480 --> 00:05:42,400 Speaker 1: consider those comments? Or did they fail to follow the 96 00:05:42,440 --> 00:05:45,760 Speaker 1: Administrative Procedures Act Because they didn't, they ignored them. And 97 00:05:45,800 --> 00:05:48,279 Speaker 1: that's actually a pretty strong argument that they didn't follow 98 00:05:48,320 --> 00:05:51,520 Speaker 1: their own rules. Another really good one is that the 99 00:05:51,640 --> 00:05:55,240 Speaker 1: FCC under this blocks the states from making their own 100 00:05:55,240 --> 00:05:59,039 Speaker 1: net neutrality rules, and so attorneys general can argue that 101 00:05:59,080 --> 00:06:02,400 Speaker 1: the FCC does and have the authority to prevent state 102 00:06:02,440 --> 00:06:06,320 Speaker 1: consumer protection laws, and one California state senator has already 103 00:06:06,320 --> 00:06:08,839 Speaker 1: said he's going to introduce a bill to impose net 104 00:06:08,839 --> 00:06:12,200 Speaker 1: neutrality rules in that state. And so you know, the 105 00:06:12,279 --> 00:06:15,800 Speaker 1: FCC doesn't have unlimited authority to preempt and that may 106 00:06:15,800 --> 00:06:19,960 Speaker 1: be actually the strongest argument. Well, let's talk David a 107 00:06:19,960 --> 00:06:22,640 Speaker 1: little bit about what some of the arguments are for 108 00:06:22,800 --> 00:06:26,480 Speaker 1: dropping these net neutrality provisions. Right, because some of the 109 00:06:26,520 --> 00:06:29,719 Speaker 1: internet service providers have argued that they would actually be 110 00:06:29,760 --> 00:06:33,120 Speaker 1: able to invest more in their infrastructure if they had 111 00:06:33,279 --> 00:06:38,040 Speaker 1: less government control. Can you speak to that, well, I mean, 112 00:06:38,080 --> 00:06:41,200 Speaker 1: certainly anybody who's getting involved. If you're running a railroad 113 00:06:41,480 --> 00:06:44,080 Speaker 1: and you basically have a closed loop, you could argue, yes, 114 00:06:44,120 --> 00:06:45,919 Speaker 1: if I could earn more money on the traffic I have, 115 00:06:45,920 --> 00:06:49,719 Speaker 1: I'd be willing to spend more money to upgrade the infrastructure. Um. 116 00:06:49,720 --> 00:06:51,560 Speaker 1: You know this this is in some ways sort of 117 00:06:51,600 --> 00:06:54,400 Speaker 1: an argument that kind of begs the question. Everybody's going 118 00:06:54,440 --> 00:06:56,400 Speaker 1: to come back and say, look, if I could optimize 119 00:06:56,440 --> 00:06:58,920 Speaker 1: for our returns, I would throw you know, a greater 120 00:06:58,960 --> 00:07:02,880 Speaker 1: amount of at an issue. So you know, in some respect, 121 00:07:02,960 --> 00:07:05,600 Speaker 1: these are companies that on their own are sufficiently profitable. 122 00:07:05,880 --> 00:07:09,040 Speaker 1: They aren't regulated to the extent that utilities have been 123 00:07:09,040 --> 00:07:11,360 Speaker 1: in the past in which their rates of return were 124 00:07:11,480 --> 00:07:14,560 Speaker 1: capped on the investments that they made. And you know, 125 00:07:14,680 --> 00:07:17,520 Speaker 1: maybe they're trying to rely upon people's mindset that this 126 00:07:17,600 --> 00:07:20,200 Speaker 1: might be something that's the case, but it's not necessarily 127 00:07:20,240 --> 00:07:23,040 Speaker 1: so in dealing with the FCC, or in specifics, dealing 128 00:07:23,080 --> 00:07:25,800 Speaker 1: with these companies who obviously are quite well off on 129 00:07:25,840 --> 00:07:28,320 Speaker 1: their own already to begin with, well, David, if if 130 00:07:28,320 --> 00:07:32,400 Speaker 1: they're not going to raise prices, does this matter? Well, 131 00:07:32,440 --> 00:07:34,280 Speaker 1: I mean, the issue really boils down to is that, 132 00:07:34,400 --> 00:07:36,120 Speaker 1: you know, do you really trust the fox to run 133 00:07:36,160 --> 00:07:39,440 Speaker 1: the henhouse? And so from that standpoint, they may say 134 00:07:39,440 --> 00:07:41,679 Speaker 1: they're not going to raise prices, but what in effect 135 00:07:42,040 --> 00:07:44,960 Speaker 1: is going to perhaps prevent them from doing so, and 136 00:07:45,000 --> 00:07:47,680 Speaker 1: doing so in a manner that's less than public At least, 137 00:07:47,680 --> 00:07:49,920 Speaker 1: the benefit that you get from the standpoint of having 138 00:07:49,920 --> 00:07:53,720 Speaker 1: a regulatory agency such as the FCC oversee this process 139 00:07:53,800 --> 00:07:56,680 Speaker 1: and be the one who does have determinative power in 140 00:07:56,680 --> 00:07:59,720 Speaker 1: this case perhaps leads to a situation where it's more 141 00:07:59,800 --> 00:08:02,720 Speaker 1: likely that something of a utility nature of these companies 142 00:08:02,720 --> 00:08:05,920 Speaker 1: would be upheld, rather than looking at possibly the dysfunctional 143 00:08:05,960 --> 00:08:09,280 Speaker 1: outcome of having differential pricing and having the creation of 144 00:08:09,280 --> 00:08:12,760 Speaker 1: a digital divide that affects not just consumers but also businesses. 145 00:08:13,160 --> 00:08:16,400 Speaker 1: David Garretty, CEO of g v A Research, and of 146 00:08:16,440 --> 00:08:20,119 Speaker 1: course June Grasso, legal expert UH and Bloomberg radio host 147 00:08:20,680 --> 00:08:22,720 Speaker 1: here with us as well. Thank you to both of 148 00:08:22,760 --> 00:08:24,800 Speaker 1: you very much for breaking this down a lot of 149 00:08:24,840 --> 00:08:29,960 Speaker 1: interesting issues and UH right now we are hoping, I 150 00:08:30,000 --> 00:08:32,760 Speaker 1: suppose to get some clarity in the near future, although 151 00:08:32,760 --> 00:08:34,760 Speaker 1: this is probably going to be dragged on for a 152 00:08:34,800 --> 00:08:39,360 Speaker 1: while as the Attorneys General put this to a legal challenge, 153 00:08:39,600 --> 00:08:59,760 Speaker 1: and we will cover it here. This has become a 154 00:09:00,040 --> 00:09:03,760 Speaker 1: dirty thing to produce. This was a line talking about 155 00:09:04,040 --> 00:09:07,480 Speaker 1: bitcoin in an article today on the Bloomberg that digs 156 00:09:07,559 --> 00:09:10,880 Speaker 1: behind the scenes behind this unbelievable rally that we have 157 00:09:10,920 --> 00:09:14,520 Speaker 1: seen in the cryptocurrency this year, as to how much 158 00:09:14,640 --> 00:09:18,880 Speaker 1: energy it's producing and what exactly are the assets that 159 00:09:18,920 --> 00:09:21,600 Speaker 1: are being used to produce that energy. Here to talk 160 00:09:21,640 --> 00:09:25,000 Speaker 1: about that is Eddie vander Walt. He is commodities reporter 161 00:09:25,080 --> 00:09:28,880 Speaker 1: for Bloomberg News, coming to us from London. Eddie, let's 162 00:09:28,880 --> 00:09:32,560 Speaker 1: just start with the energy consumption of bitcoin mining. There's 163 00:09:32,559 --> 00:09:36,520 Speaker 1: been a lot of discussion that it is incredibly energy intensive. 164 00:09:36,760 --> 00:09:40,040 Speaker 1: Can you explain, right, Yeah, that's exactly right, it is. 165 00:09:40,120 --> 00:09:45,120 Speaker 1: It's it's very energy intensive, and that's that's built into 166 00:09:45,160 --> 00:09:49,280 Speaker 1: into the DNA of of bitcoin. Really UM. In order 167 00:09:49,320 --> 00:09:51,640 Speaker 1: to make the well, in order to make the in 168 00:09:51,720 --> 00:09:53,840 Speaker 1: order to make each coin secure, and in order to 169 00:09:53,880 --> 00:09:59,439 Speaker 1: make it difficult to limit supply. UM the creator, person 170 00:09:59,480 --> 00:10:02,920 Speaker 1: by the name of Satoshi no Komoto UM set it 171 00:10:03,000 --> 00:10:04,920 Speaker 1: up in such a way that you would have to 172 00:10:05,040 --> 00:10:08,440 Speaker 1: prove that you've done some work in order to to 173 00:10:08,520 --> 00:10:11,840 Speaker 1: get a bitcoin as a as a as a result, UM, 174 00:10:11,880 --> 00:10:14,000 Speaker 1: he he modeled it a lot on on gold mining. 175 00:10:14,040 --> 00:10:17,120 Speaker 1: So what they use is they use a big server, 176 00:10:17,280 --> 00:10:21,360 Speaker 1: farms computers, hundreds or thousands of them in in a room, 177 00:10:21,400 --> 00:10:23,360 Speaker 1: this sort of thing that you would see a Google 178 00:10:23,520 --> 00:10:27,400 Speaker 1: or or or a Microsoft data center use. UM and 179 00:10:27,400 --> 00:10:30,560 Speaker 1: and all of these try to solve a mathematical problem. 180 00:10:30,720 --> 00:10:34,160 Speaker 1: But the thing is they all use electricity, and quite 181 00:10:34,200 --> 00:10:37,240 Speaker 1: a lot of it, alright. So if they used quite 182 00:10:37,240 --> 00:10:39,880 Speaker 1: a lot of electricity and they're in China, chances are 183 00:10:39,880 --> 00:10:42,240 Speaker 1: they using a lot of call to generate that electricity. 184 00:10:42,280 --> 00:10:44,679 Speaker 1: Is that the basic premise right right? That would be 185 00:10:44,720 --> 00:10:47,040 Speaker 1: an easy assumption to make, and and and and we did. 186 00:10:47,200 --> 00:10:49,280 Speaker 1: When we first looked at this, this is this is 187 00:10:49,320 --> 00:10:52,440 Speaker 1: This was our starting point. But of course you could 188 00:10:52,720 --> 00:10:55,959 Speaker 1: in China they have a lot of hydro electric facilities 189 00:10:56,000 --> 00:10:59,360 Speaker 1: as well, which is very clean, very cheap once it's built, 190 00:11:00,040 --> 00:11:03,600 Speaker 1: um and and they could be plugged into these things. 191 00:11:03,600 --> 00:11:06,040 Speaker 1: But when we actually broke down the data and when 192 00:11:06,040 --> 00:11:09,360 Speaker 1: we looked at where the server farms were located, some 193 00:11:09,520 --> 00:11:12,760 Speaker 1: of them were located around the hydro electric facilities, but 194 00:11:12,840 --> 00:11:15,200 Speaker 1: a lot was also and particularly a lot of the 195 00:11:15,280 --> 00:11:17,800 Speaker 1: large ones were way up in the north, a long 196 00:11:17,880 --> 00:11:22,200 Speaker 1: way from these places. So or all evidence indicates that 197 00:11:22,240 --> 00:11:25,800 Speaker 1: they are they probably um plugged into coal power plants. 198 00:11:26,120 --> 00:11:29,360 Speaker 1: So Eddie, this this is sort of one of the mysteries. 199 00:11:29,360 --> 00:11:32,280 Speaker 1: A lot of people think of bitcoin as being a 200 00:11:32,280 --> 00:11:36,479 Speaker 1: product of Silicon Valley and a sort of hipster mentality, 201 00:11:36,559 --> 00:11:39,160 Speaker 1: or as the reality of the trading really mostly happens 202 00:11:39,679 --> 00:11:44,120 Speaker 1: in Asia, particularly in career retailers as well as in China. 203 00:11:44,400 --> 00:11:48,160 Speaker 1: How much emphasis among the bitcoin community is there to 204 00:11:48,480 --> 00:11:53,200 Speaker 1: this high energy consumption aspect of bitcoin or is this 205 00:11:53,360 --> 00:11:56,040 Speaker 1: something that's just chalked up as sort of a new 206 00:11:56,120 --> 00:11:58,120 Speaker 1: bi issue in other words, it will get more efficient 207 00:11:58,120 --> 00:12:01,200 Speaker 1: over time. I think that's I think I think there's definitely. 208 00:12:01,280 --> 00:12:04,560 Speaker 1: The community say that it is defensible. They say that 209 00:12:04,600 --> 00:12:08,480 Speaker 1: it is uh that even even the large estimates mean 210 00:12:08,559 --> 00:12:11,000 Speaker 1: that it is only they say something like one point 211 00:12:11,120 --> 00:12:14,400 Speaker 1: nor point one percent of of global energy demand, which 212 00:12:14,960 --> 00:12:18,160 Speaker 1: is still pretty high for for for a fairly unproven product. 213 00:12:18,200 --> 00:12:21,679 Speaker 1: But the the community will say that, yes, we will 214 00:12:21,720 --> 00:12:24,679 Speaker 1: become more efficient over time, and we will we will 215 00:12:24,720 --> 00:12:27,559 Speaker 1: do this in a cheaper way. UM. So I think 216 00:12:27,559 --> 00:12:30,920 Speaker 1: there's there's definitely. But one thing that we have noticed 217 00:12:31,200 --> 00:12:33,280 Speaker 1: is that three months ago, because this story didn't we 218 00:12:33,280 --> 00:12:35,199 Speaker 1: didn't write this overnight, right, this too, This took that 219 00:12:35,240 --> 00:12:37,560 Speaker 1: took substantial amount of time to do the research. And 220 00:12:37,559 --> 00:12:39,880 Speaker 1: when we when we started doing the research, the prices 221 00:12:39,920 --> 00:12:43,400 Speaker 1: were substantially lower. Um. And at that point we were 222 00:12:43,400 --> 00:12:46,439 Speaker 1: talking to people, they said, look, we can't mind. In Europe, 223 00:12:46,640 --> 00:12:50,800 Speaker 1: it is not efficient. It's not economical for us to 224 00:12:50,800 --> 00:12:53,560 Speaker 1: do so. It costs us more in electricity to mine 225 00:12:53,559 --> 00:12:57,560 Speaker 1: a new bitcoin than we get for selling it. Now. Ever, 226 00:12:57,600 --> 00:13:01,240 Speaker 1: s a surprise is rallied what two tho? Yeah? Uh, 227 00:13:01,400 --> 00:13:05,400 Speaker 1: the equations changed somewhat and and and we've got people saying, look, 228 00:13:05,400 --> 00:13:08,679 Speaker 1: it's it's efficient everywhere, but that certainly wasn't the case 229 00:13:08,679 --> 00:13:10,719 Speaker 1: when we started. And if prices come down a little bit, 230 00:13:10,720 --> 00:13:13,200 Speaker 1: it may not be UM may not be economically in 231 00:13:13,240 --> 00:13:17,439 Speaker 1: Europe again well, and using my Bloomberg here and doing 232 00:13:17,600 --> 00:13:21,240 Speaker 1: v C C Y it is a pneumonic that I 233 00:13:21,280 --> 00:13:25,080 Speaker 1: think many people will begin to learn. Uh. It tracks 234 00:13:25,120 --> 00:13:29,520 Speaker 1: the cryptocurrency market. Bitcoin up about seven percent right now, 235 00:13:29,600 --> 00:13:32,640 Speaker 1: seventeen thousand, six hundred and fifty. What about the other 236 00:13:32,720 --> 00:13:37,560 Speaker 1: cryptocurrencies such as a ripple or ethereum or light coin. 237 00:13:37,880 --> 00:13:40,880 Speaker 1: Are they also being mined in the same manner, right? 238 00:13:41,200 --> 00:13:44,120 Speaker 1: I saw a story earlier today saying that Ripple is 239 00:13:44,200 --> 00:13:47,800 Speaker 1: ass has become the third biggest behind ethereum and and 240 00:13:47,800 --> 00:13:53,360 Speaker 1: and Bitcoin today. UM it varies, certainly. Ethereum is a 241 00:13:53,360 --> 00:13:57,000 Speaker 1: lot more efficient and at this stage, and the way 242 00:13:57,040 --> 00:13:59,319 Speaker 1: that is set up early in early in the in 243 00:13:59,360 --> 00:14:03,080 Speaker 1: the production process or in the coin's lifespan as it were, 244 00:14:04,080 --> 00:14:06,600 Speaker 1: it is it is it's cheaper to mine UM. That's 245 00:14:06,640 --> 00:14:09,400 Speaker 1: by design, and and the and the the more established 246 00:14:09,440 --> 00:14:11,400 Speaker 1: the coin becomes, and the more miners who pile in, 247 00:14:11,760 --> 00:14:15,160 Speaker 1: the more expensive it becomes. So these coins by definition 248 00:14:15,160 --> 00:14:18,679 Speaker 1: are younger, but coin was there first. But also efficiencies 249 00:14:18,720 --> 00:14:22,040 Speaker 1: have been built into ethereum and so on. So yes, 250 00:14:22,120 --> 00:14:25,080 Speaker 1: I think I think as we go through the iterations 251 00:14:25,120 --> 00:14:30,080 Speaker 1: and and u as the as the industry evolves, I 252 00:14:30,080 --> 00:14:32,640 Speaker 1: think a lot of these problems will be solved. Eddie, 253 00:14:32,680 --> 00:14:36,520 Speaker 1: real quick, is it cheaper to use so called dirty 254 00:14:36,680 --> 00:14:41,360 Speaker 1: energy or call energy to power some of these crypto 255 00:14:41,560 --> 00:14:45,920 Speaker 1: mining centers than it is to use renewable energies? Definitely is? 256 00:14:45,960 --> 00:14:50,360 Speaker 1: It's definitely, it's definitely cheaper to my So it's definitely 257 00:14:50,440 --> 00:14:53,960 Speaker 1: cheaper in places that use dirty electricity because a lot 258 00:14:53,960 --> 00:14:57,520 Speaker 1: of places that use clean electricity, that that have a 259 00:14:58,040 --> 00:15:02,280 Speaker 1: energy mix that's more related towards non fossil fuel UM 260 00:15:02,760 --> 00:15:08,640 Speaker 1: types of electricity. The electricity is actually subsidized, and that 261 00:15:08,680 --> 00:15:12,280 Speaker 1: means that your energy uses is heavily taxed UM. So 262 00:15:12,320 --> 00:15:14,880 Speaker 1: what makes it expensive in Europe is taxes. But also 263 00:15:15,840 --> 00:15:19,080 Speaker 1: it's just plain and simple, cold is cheap. Thanks very 264 00:15:19,160 --> 00:15:22,840 Speaker 1: much for joining us. Eddie Vandervolt is our commodities reporter 265 00:15:22,920 --> 00:15:28,000 Speaker 1: for Bloomberg, joining us from our London studios talking about cryptocurrencies. 266 00:15:46,800 --> 00:15:50,640 Speaker 1: The tax plan is moving forward, and President Trump says 267 00:15:50,680 --> 00:15:54,520 Speaker 1: he's expecting to sign a bill early next week that 268 00:15:54,600 --> 00:15:59,000 Speaker 1: would be the biggest transformation of US tax policy in decades. 269 00:15:59,080 --> 00:16:01,480 Speaker 1: Here to discuss it with US is Rick Lazio, senior 270 00:16:01,560 --> 00:16:05,800 Speaker 1: vice president of Alliance Group, also former US Representative from 271 00:16:05,920 --> 00:16:10,400 Speaker 1: New York serving in Congress from two thousand and one. 272 00:16:10,640 --> 00:16:14,320 Speaker 1: Congressman Lazio, I'd love to just first start with, how 273 00:16:14,360 --> 00:16:18,680 Speaker 1: do you address criticism that this bill helps companies that 274 00:16:18,920 --> 00:16:21,800 Speaker 1: don't need help and don't have any incentive to really 275 00:16:21,840 --> 00:16:25,960 Speaker 1: invest in their infrastructure, won't necessarily accelerate the US economy 276 00:16:26,440 --> 00:16:27,840 Speaker 1: and doesn't give that much of a boost to the 277 00:16:27,840 --> 00:16:29,720 Speaker 1: middle class. How do you respond to that because that 278 00:16:29,880 --> 00:16:34,680 Speaker 1: is the big core kind of criticism with the whole bill. Right. Well, 279 00:16:34,840 --> 00:16:38,520 Speaker 1: you know, the trend GDP growth historically post World War 280 00:16:38,560 --> 00:16:42,040 Speaker 1: two period has been around three percent. We have been 281 00:16:42,320 --> 00:16:45,840 Speaker 1: around two point two percent since two thousand and eight, 282 00:16:45,880 --> 00:16:48,840 Speaker 1: since the Great Recession ended with a pick up the 283 00:16:48,920 --> 00:16:51,720 Speaker 1: last couple of quarters granted in the three and three 284 00:16:51,280 --> 00:16:56,520 Speaker 1: point So the the economy is underperforming. The projections at 285 00:16:56,560 --> 00:17:00,320 Speaker 1: least from the internal scorekeepers the Congressional Budget Office in 286 00:17:00,400 --> 00:17:03,160 Speaker 1: Congress is for the next teen years growth at one 287 00:17:03,440 --> 00:17:07,439 Speaker 1: nine percent. That's an enormous uh difference in terms of 288 00:17:07,640 --> 00:17:13,639 Speaker 1: lost output in economic activity revenue for individuals and for businesses, 289 00:17:13,720 --> 00:17:16,440 Speaker 1: and what Congress is trying to do is to close 290 00:17:16,520 --> 00:17:19,720 Speaker 1: that gap. Even a little bit would make an enormous difference. 291 00:17:19,760 --> 00:17:23,040 Speaker 1: The weak parts in most of the of the expansion 292 00:17:23,640 --> 00:17:28,520 Speaker 1: have centered around business investment, with businesses relying more on 293 00:17:28,760 --> 00:17:31,600 Speaker 1: adding headcount or hiring more people over the last several 294 00:17:31,720 --> 00:17:36,280 Speaker 1: years than investing in the kind of productivity enhancing things 295 00:17:36,320 --> 00:17:39,240 Speaker 1: like new plants or new equipment. That's been a soft 296 00:17:39,280 --> 00:17:41,600 Speaker 1: spot up until the last quarter or two, I'd say, 297 00:17:41,680 --> 00:17:44,560 Speaker 1: so the focus has been on this. Two thirds of 298 00:17:44,600 --> 00:17:47,640 Speaker 1: the tax bill is really focused on trying to stimulate 299 00:17:47,680 --> 00:17:51,560 Speaker 1: the business community, bus pass throughs, smaller businesses and larger 300 00:17:51,640 --> 00:17:54,960 Speaker 1: C corps businesses. Hold on a second, because I'm struggling 301 00:17:54,960 --> 00:17:57,199 Speaker 1: with this. I'm struggling with the two point three trillion 302 00:17:57,240 --> 00:17:59,880 Speaker 1: dollar figure that we see, and that's the cash holdings 303 00:18:00,160 --> 00:18:04,200 Speaker 1: corporations have. That's an estimate. It could be bigger, and 304 00:18:04,320 --> 00:18:07,760 Speaker 1: I'm looking at a pretty accommodative credit market. People have 305 00:18:07,800 --> 00:18:12,000 Speaker 1: been able to borrow pretty easily. Companies especially what what 306 00:18:12,240 --> 00:18:16,080 Speaker 1: more do they need? Well, I think they need visibility 307 00:18:15,920 --> 00:18:18,359 Speaker 1: they need to need to know they've got some permanence 308 00:18:18,400 --> 00:18:20,960 Speaker 1: on the tax side, and that they've got more competence 309 00:18:21,000 --> 00:18:24,560 Speaker 1: on the regulatory side. And just as importantly, by the way, 310 00:18:24,600 --> 00:18:27,400 Speaker 1: the demand is growing, so that's on the consumer side 311 00:18:27,400 --> 00:18:31,639 Speaker 1: where the GDP is. So all that kind of leads 312 00:18:31,680 --> 00:18:35,440 Speaker 1: to can we get people to feel more confidence? That's 313 00:18:35,480 --> 00:18:37,840 Speaker 1: why the STEAD is in part, by the way, so 314 00:18:37,960 --> 00:18:41,840 Speaker 1: focused on inflation. Janet yellenan and Stead yesterday saying the 315 00:18:41,880 --> 00:18:44,280 Speaker 1: tax bill itself, they're not concerned about it. In fact, 316 00:18:44,280 --> 00:18:48,800 Speaker 1: it may well add to growth and lower unemployment. Those 317 00:18:48,920 --> 00:18:52,080 Speaker 1: are are general positives as long as we don't overheat 318 00:18:52,160 --> 00:18:54,439 Speaker 1: and right now to try and get that inflation up 319 00:18:54,480 --> 00:18:57,800 Speaker 1: a little bit. This this stimulus could be just what 320 00:18:57,880 --> 00:19:01,719 Speaker 1: the doctor ordered. UH. Congress and last year, do you 321 00:19:01,880 --> 00:19:06,320 Speaker 1: believe that the tax overhaul UH makes it easier or 322 00:19:06,400 --> 00:19:13,719 Speaker 1: more difficult to fund infrastructure? Um? It's that that depends 323 00:19:13,800 --> 00:19:16,959 Speaker 1: on how the infrastructure is funded and how much they 324 00:19:17,040 --> 00:19:21,760 Speaker 1: leverage private sector dollars. I think UM, I think infrastructure 325 00:19:22,600 --> 00:19:26,239 Speaker 1: could be and should be a more bipartisan effort. I 326 00:19:26,320 --> 00:19:29,200 Speaker 1: think it will. Yeah, but what about the actual overhaul? 327 00:19:29,280 --> 00:19:32,560 Speaker 1: From what you know about this tax bill, do you 328 00:19:32,600 --> 00:19:37,280 Speaker 1: believe that it will make it easier or more difficult, 329 00:19:38,000 --> 00:19:42,320 Speaker 1: less expensive, more expensive to invest in building bridges, fixing 330 00:19:42,400 --> 00:19:46,439 Speaker 1: roads and highways. Yeah, I'm not sure I know the answer. 331 00:19:46,480 --> 00:19:48,760 Speaker 1: That I know this that if this works the way 332 00:19:49,280 --> 00:19:51,960 Speaker 1: the proponents wanted to work, you'll see a growing economy 333 00:19:52,000 --> 00:19:54,960 Speaker 1: with investors on the outside that are looking to place money, 334 00:19:55,000 --> 00:19:58,040 Speaker 1: including in areas like infrastructure. And what they've been talking 335 00:19:58,080 --> 00:20:03,120 Speaker 1: about has not been a Paul totally publicly financed infrastructure initiative, 336 00:20:03,160 --> 00:20:06,200 Speaker 1: but something that would try and leverage private dollars as well. 337 00:20:07,119 --> 00:20:12,359 Speaker 1: Who are the in your estimation, who are the Republicans that, 338 00:20:12,480 --> 00:20:18,040 Speaker 1: particularly in the Senate that may scupper uh this tax overhaul. Well, 339 00:20:18,040 --> 00:20:23,280 Speaker 1: you've got two senators that the Senator uh uh McCain 340 00:20:23,400 --> 00:20:26,600 Speaker 1: being one of them that has been struggling with health issues. 341 00:20:26,960 --> 00:20:30,119 Speaker 1: Santa Quarker voted against the package in the Senate, so 342 00:20:30,160 --> 00:20:35,800 Speaker 1: he's clearly a question mark. UM. Senator Collins from Maine 343 00:20:35,880 --> 00:20:41,240 Speaker 1: Senator Rubio from Florida have raised questions UH. Senator Lee 344 00:20:41,280 --> 00:20:44,760 Speaker 1: as well, UH Rubio and Lee on the child tax 345 00:20:44,800 --> 00:20:48,480 Speaker 1: credit issue. So there are no every one of these 346 00:20:48,600 --> 00:20:53,040 Speaker 1: senators understands the incredible leverage that they have with a 347 00:20:53,119 --> 00:20:56,600 Speaker 1: very tight majority. Uh, and so they are going to 348 00:20:56,720 --> 00:21:00,199 Speaker 1: raise their issues and squeeze the leadership, and the negotiater is, 349 00:21:00,359 --> 00:21:04,880 Speaker 1: by my experience, by by at least threatening to withhold 350 00:21:04,920 --> 00:21:07,440 Speaker 1: their vote until they get some movement in their direction. 351 00:21:07,520 --> 00:21:09,880 Speaker 1: So this is the kind of last minute horse trading 352 00:21:09,960 --> 00:21:13,320 Speaker 1: that occurs. But again, the big picture is can we 353 00:21:13,359 --> 00:21:16,760 Speaker 1: get more research and development, can we get higher productivity? 354 00:21:17,200 --> 00:21:20,240 Speaker 1: Can we get businesses to start to invest in the future. 355 00:21:20,760 --> 00:21:24,119 Speaker 1: Can we get them to to be more forward leaning 356 00:21:24,119 --> 00:21:26,600 Speaker 1: than they have been over the last several years. Congressman, 357 00:21:26,640 --> 00:21:28,920 Speaker 1: laws are real quick. If you were still in Congress, 358 00:21:29,119 --> 00:21:32,520 Speaker 1: would you vote for this? I would vote for it, 359 00:21:32,560 --> 00:21:34,840 Speaker 1: but I would have would would have been you know, 360 00:21:35,040 --> 00:21:37,520 Speaker 1: I'm from New York. I'm a New York taxpayer, so 361 00:21:37,560 --> 00:21:40,600 Speaker 1: I'm gonna be a net loser on this tax bill. Um. 362 00:21:40,640 --> 00:21:42,200 Speaker 1: There are a lot of people in my position. I 363 00:21:42,240 --> 00:21:45,040 Speaker 1: would have fought quite hard to try and address some 364 00:21:45,080 --> 00:21:48,879 Speaker 1: of those issues that are important to the coasts. But 365 00:21:49,160 --> 00:21:52,199 Speaker 1: I understand it. I think overall, if you if you 366 00:21:52,560 --> 00:21:54,639 Speaker 1: have if you if you're playing to win and you 367 00:21:54,680 --> 00:21:57,560 Speaker 1: want long term growth, clearly you've got to address the 368 00:21:57,560 --> 00:22:01,520 Speaker 1: international corporate tax issues almost people on both sides. They 369 00:22:01,520 --> 00:22:04,840 Speaker 1: I'll agree to that completly. You need to do something 370 00:22:04,920 --> 00:22:07,919 Speaker 1: more on the business side to build confidence and have 371 00:22:08,000 --> 00:22:10,359 Speaker 1: some permanency. And clearly you need to do something again, 372 00:22:10,960 --> 00:22:15,080 Speaker 1: uh to to incentivize more research, more development, more productivity, 373 00:22:15,359 --> 00:22:18,280 Speaker 1: enhancing investments for business, and I think this bill will 374 00:22:18,320 --> 00:22:21,320 Speaker 1: do that. Thank you very much, Former US Congressman to 375 00:22:21,400 --> 00:22:25,399 Speaker 1: Rick Lazio, senior vice president at Alliance Group, on the 376 00:22:25,440 --> 00:22:46,560 Speaker 1: tax overhaul plan. Star Wars the Last Jedi. It is 377 00:22:46,640 --> 00:22:51,080 Speaker 1: the second highest domestic preview grows of all time according 378 00:22:51,119 --> 00:22:55,600 Speaker 1: to the Walt Disney Company. In the Films Today International 379 00:22:55,920 --> 00:23:00,040 Speaker 1: release or preview, the cumulative box office grows is a 380 00:23:00,400 --> 00:23:04,800 Speaker 1: hundred and five million dollars. So can anything go wrong 381 00:23:04,840 --> 00:23:07,800 Speaker 1: with the Kingdom of Mickey Mouse now being joined by 382 00:23:07,800 --> 00:23:10,320 Speaker 1: the likes of twenty one Century Fox? Here to tell 383 00:23:10,400 --> 00:23:13,560 Speaker 1: us more is Joe No Sarah columnists for Bloomberg View 384 00:23:13,800 --> 00:23:16,920 Speaker 1: and you can follow Joe on Twitter at No Sarah 385 00:23:17,080 --> 00:23:20,119 Speaker 1: b V. That's for Bloomberg View. Joe. So what do 386 00:23:20,160 --> 00:23:24,040 Speaker 1: you think about this UH fifty two plus billion dollar 387 00:23:24,119 --> 00:23:28,040 Speaker 1: acquisition of these Century Fox assets. I think that the 388 00:23:28,119 --> 00:23:31,760 Speaker 1: day will come when they look upon the Fox assets 389 00:23:31,840 --> 00:23:35,920 Speaker 1: the way they're looking at ESPN. Now it's a it's 390 00:23:35,960 --> 00:23:39,959 Speaker 1: a these are assets that are going to be in Decline, 391 00:23:40,600 --> 00:23:43,520 Speaker 1: movies that people really like to watch. The movies will 392 00:23:43,520 --> 00:23:47,439 Speaker 1: do all right, um. The problem. The problem is what 393 00:23:47,560 --> 00:23:52,840 Speaker 1: Disney is talking about is taking these assets and making 394 00:23:52,880 --> 00:23:57,639 Speaker 1: them part of a streaming app that will be the 395 00:23:57,720 --> 00:24:02,520 Speaker 1: Disney version of Netflix uh and Amazon Prime. Um. And 396 00:24:02,520 --> 00:24:04,840 Speaker 1: the problem is that they don't. At the same time, 397 00:24:05,720 --> 00:24:09,560 Speaker 1: they don't want to leave the revenue that they have 398 00:24:09,680 --> 00:24:13,439 Speaker 1: always gotten and still get to some extent from the 399 00:24:13,520 --> 00:24:17,320 Speaker 1: legacy media i e. The cable bundle, and so they 400 00:24:17,400 --> 00:24:19,920 Speaker 1: you know, they're doing screwy things like they're saying, well, 401 00:24:20,160 --> 00:24:23,760 Speaker 1: we know esp ESPNS and Decline, we know that we 402 00:24:23,840 --> 00:24:27,320 Speaker 1: need to stream it, but we're not gonna put anything 403 00:24:27,359 --> 00:24:31,720 Speaker 1: on the streaming app that's on television. Well, hold on 404 00:24:31,760 --> 00:24:36,919 Speaker 1: a second. So you're saying that they haven't disclosed or 405 00:24:36,920 --> 00:24:40,119 Speaker 1: perhaps even thought out exactly how they are going to 406 00:24:40,840 --> 00:24:42,879 Speaker 1: how much of their empire they're going to commit to 407 00:24:42,920 --> 00:24:45,560 Speaker 1: the streaming service and we're talking about Hulu uh and 408 00:24:45,840 --> 00:24:47,880 Speaker 1: how much they're going to try to compete with Netflix 409 00:24:47,920 --> 00:24:50,679 Speaker 1: at Amazon Prime. Well, I don't think I don't think 410 00:24:50,680 --> 00:24:53,560 Speaker 1: they're gonna use Hulu at all in this. I think 411 00:24:53,560 --> 00:24:56,159 Speaker 1: they're going to have their own streaming app. That's going 412 00:24:56,240 --> 00:25:01,399 Speaker 1: to be Disney Movies, Pixar Movies, twenty one Century Movies, UM, 413 00:25:01,440 --> 00:25:04,880 Speaker 1: old Fox Shows, Old f X shows, UM that that's 414 00:25:04,920 --> 00:25:08,720 Speaker 1: how I nationally gret some things from National Geographic. I mean, 415 00:25:08,760 --> 00:25:10,920 Speaker 1: I think that could be a pretty powerful streaming app. 416 00:25:11,200 --> 00:25:14,600 Speaker 1: But the question is, you know, how how how much 417 00:25:14,640 --> 00:25:16,920 Speaker 1: money are they going to commit to new content? How 418 00:25:16,960 --> 00:25:18,520 Speaker 1: much are they just going to think about it as 419 00:25:18,640 --> 00:25:21,240 Speaker 1: you know, someplace to stuff old content? You know, how 420 00:25:21,359 --> 00:25:24,720 Speaker 1: much are they going to abandon their need to uh 421 00:25:24,800 --> 00:25:28,320 Speaker 1: for revenue from the cable bundle? And and to me, 422 00:25:28,640 --> 00:25:31,600 Speaker 1: that's the that's the core question. Uh do you know 423 00:25:31,640 --> 00:25:35,000 Speaker 1: anybody under thirty who has a who has who have 424 00:25:35,240 --> 00:25:41,040 Speaker 1: who have a cable subscription? There's an ereie silence there, Yes, alright, 425 00:25:41,080 --> 00:25:47,119 Speaker 1: subscribe subscribers, subscribers. Subscriber count for cable television has continued 426 00:25:47,200 --> 00:25:51,880 Speaker 1: to decline. Got that? So what do you believe Disney 427 00:25:51,880 --> 00:25:55,560 Speaker 1: will have to do in order to access either your 428 00:25:55,640 --> 00:25:59,479 Speaker 1: mobile phone or your monitor, your screen at home in 429 00:25:59,560 --> 00:26:01,720 Speaker 1: order to make this happen? Because right now, what you 430 00:26:01,800 --> 00:26:05,280 Speaker 1: have Amazon, as you've described with their fire stick, You've 431 00:26:05,320 --> 00:26:09,840 Speaker 1: got Roku the player, plus you have of course the 432 00:26:09,880 --> 00:26:13,000 Speaker 1: Apple uh TV and Chrome cast is now we're going 433 00:26:13,040 --> 00:26:15,399 Speaker 1: to get another get the plug into No no, no, 434 00:26:15,480 --> 00:26:17,760 Speaker 1: it'll be an It'll be an app like Netflix or 435 00:26:17,800 --> 00:26:20,880 Speaker 1: Amazon Prime. I mean the real question is will there 436 00:26:20,920 --> 00:26:25,399 Speaker 1: be enough content on it to attract all those people 437 00:26:25,480 --> 00:26:28,040 Speaker 1: who are either cutting the cord or never got the 438 00:26:28,080 --> 00:26:30,480 Speaker 1: chord in the first place. That that's really the question. 439 00:26:30,840 --> 00:26:33,320 Speaker 1: And I don't think the answer at the moment is yes, 440 00:26:33,359 --> 00:26:35,680 Speaker 1: because I don't think they're all I don't think they're 441 00:26:35,680 --> 00:26:38,760 Speaker 1: all in. I think there's still have one ft in 442 00:26:38,880 --> 00:26:43,080 Speaker 1: cable and one foot theoretically in streaming. Now. The second 443 00:26:43,160 --> 00:26:47,600 Speaker 1: issue is technology Netflix and people don't really think about this, 444 00:26:47,680 --> 00:26:52,920 Speaker 1: but the Netflix interface is fabulous and they think about 445 00:26:52,960 --> 00:26:54,960 Speaker 1: it all the time and they fiddle with it all 446 00:26:55,000 --> 00:26:58,200 Speaker 1: the time. And there's nothing comparable out there, not even 447 00:26:58,320 --> 00:27:02,439 Speaker 1: HBO in terms of suggesting things for you or or 448 00:27:02,760 --> 00:27:06,760 Speaker 1: or you know, showing you previews of things. And Disney 449 00:27:06,920 --> 00:27:09,720 Speaker 1: will have a lot of work to do to catch 450 00:27:09,840 --> 00:27:13,600 Speaker 1: up with that because that's not their strength. Yeah. Well, 451 00:27:13,720 --> 00:27:16,760 Speaker 1: I'm wondering and just talking about Netflix. I know you 452 00:27:16,800 --> 00:27:20,840 Speaker 1: have written a number of columns about how good Netflix 453 00:27:20,920 --> 00:27:22,199 Speaker 1: is and how you think that they're going to be 454 00:27:22,320 --> 00:27:26,440 Speaker 1: very successful in their strategy. I'm wondering how much that's 455 00:27:26,520 --> 00:27:30,600 Speaker 1: coloring your perception here that basically Disney has a very 456 00:27:30,760 --> 00:27:35,320 Speaker 1: high hurdle to cross in being true competition for Netflix. 457 00:27:35,920 --> 00:27:39,080 Speaker 1: That's that's definitely affected my thinking. No, no question about it. 458 00:27:39,600 --> 00:27:45,479 Speaker 1: Um you know, name one legacy media company aside from HBO, 459 00:27:46,480 --> 00:27:49,760 Speaker 1: that has that has a success, has truly been successful 460 00:27:51,280 --> 00:27:56,600 Speaker 1: attracting cord cutters. But if they hadn't bought these Fox assets, 461 00:27:57,240 --> 00:28:00,280 Speaker 1: would they be in a better position. No, now they 462 00:28:00,280 --> 00:28:04,119 Speaker 1: wouldn't be invest position. My issue is that as people 463 00:28:04,720 --> 00:28:08,720 Speaker 1: abandon the cord, Fox shows on television are going to 464 00:28:08,840 --> 00:28:12,480 Speaker 1: have the same kind of decline as the ESPN is having, 465 00:28:12,920 --> 00:28:15,080 Speaker 1: and it's going to turn out to hurt them in 466 00:28:15,080 --> 00:28:18,240 Speaker 1: in an earning sense, rather than help them. I see. 467 00:28:18,240 --> 00:28:21,119 Speaker 1: So in other words, they're looking backwards and they're saying, 468 00:28:21,520 --> 00:28:23,960 Speaker 1: for us to be successful in the model we've always known, 469 00:28:24,359 --> 00:28:28,000 Speaker 1: perhaps we'll push it through these online streaming things, but 470 00:28:28,200 --> 00:28:30,520 Speaker 1: we will look at the content we've had, rather than saying, 471 00:28:30,680 --> 00:28:33,040 Speaker 1: what's the content of the future. How can we created 472 00:28:33,160 --> 00:28:35,439 Speaker 1: how can we then how you know, stream it in 473 00:28:35,480 --> 00:28:37,560 Speaker 1: the best way possible? God, I wish I had said 474 00:28:37,560 --> 00:28:40,600 Speaker 1: that in my column, but then you wouldn't have the 475 00:28:40,640 --> 00:28:43,920 Speaker 1: other paragraphs to write. Um, so, has this brought them 476 00:28:43,920 --> 00:28:46,920 Speaker 1: new competition from the likes of Verizon and A T 477 00:28:47,080 --> 00:28:50,400 Speaker 1: and T. Verizon wants to acquire a Time Warner? Sure, 478 00:28:50,520 --> 00:28:52,440 Speaker 1: I mean A T and T would have an A 479 00:28:52,520 --> 00:28:55,280 Speaker 1: T and T Time Warner would would definitely be competition. 480 00:28:55,760 --> 00:28:58,080 Speaker 1: And I could totally see Time Warner doing the same 481 00:28:58,080 --> 00:29:03,000 Speaker 1: thing Disney is trying to do. Bundle bundle Hbo Turner, Um, 482 00:29:03,240 --> 00:29:07,280 Speaker 1: Time Warner. You know Warner Brother movies. Um. Uh, don't 483 00:29:07,280 --> 00:29:12,280 Speaker 1: they have some famous cartoons? Yeah? Come on Rabbit? Oh 484 00:29:12,320 --> 00:29:15,040 Speaker 1: my god, that rabbit. So it's a real quick Um. 485 00:29:15,080 --> 00:29:18,400 Speaker 1: What would you think Disney ought to have done with 486 00:29:18,440 --> 00:29:20,760 Speaker 1: fifty two billion dollars that could have put it at 487 00:29:20,800 --> 00:29:23,880 Speaker 1: a perhaps better competitive advantage. I think they should have 488 00:29:23,880 --> 00:29:27,960 Speaker 1: bought Netflix. I think that would have solved two problems, 489 00:29:28,240 --> 00:29:31,960 Speaker 1: one the forward looking problem the streaming problem. Uh. It 490 00:29:31,960 --> 00:29:35,640 Speaker 1: would also have solved the Eiger succession problem. Because Read 491 00:29:35,680 --> 00:29:40,320 Speaker 1: Hastings is a great CEO. Does this deal put a 492 00:29:40,360 --> 00:29:44,840 Speaker 1: lot of pressure on Bob Iger absolutely, because this is 493 00:29:44,880 --> 00:29:47,880 Speaker 1: this like a key man issue right now. Well, it 494 00:29:47,920 --> 00:29:50,640 Speaker 1: definitely puts a lot of pressure on him. He's done it, 495 00:29:51,120 --> 00:29:55,840 Speaker 1: he's extended his contract to in order to uh you know, 496 00:29:55,920 --> 00:29:59,120 Speaker 1: oversee it. Uh and and you know, as other people 497 00:29:59,120 --> 00:30:01,560 Speaker 1: have said, it is legacy defining for him, so he 498 00:30:01,600 --> 00:30:04,120 Speaker 1: needs this to work. Jonah Sarah, thank you so much 499 00:30:04,160 --> 00:30:06,520 Speaker 1: for joining us. We love speaking with you. Jono Sarah, 500 00:30:06,600 --> 00:30:11,400 Speaker 1: calumnist for Bloomberg View. Um, I don't really feel too 501 00:30:11,440 --> 00:30:14,360 Speaker 1: bad for Bob Iger, considering that he got a more 502 00:30:14,360 --> 00:30:17,000 Speaker 1: than a hundred billion dollar payout from this deal and 503 00:30:17,240 --> 00:30:22,480 Speaker 1: he's not doing too badly. Thanks for listening to the 504 00:30:22,520 --> 00:30:25,640 Speaker 1: Bloomberg P and L podcast. You can subscribe and listen 505 00:30:25,640 --> 00:30:29,840 Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform 506 00:30:29,880 --> 00:30:33,760 Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox. 507 00:30:34,080 --> 00:30:37,600 Speaker 1: I'm on Twitter at Lisa abramowits one before the podcast. 508 00:30:37,640 --> 00:30:40,240 Speaker 1: You can always catch us worldwide on Bloomberg Radio.