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tv   Best of Bloomberg West  Bloomberg  September 4, 2016 6:00pm-7:01pm EDT

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emily: i am emily chang and this is the best of "bloomberg west," where we bring you the top news from the week in tech. apple up, the eu orders to pay its harshest tech penalty ever, ordering the iphone maker coughs up $18 billion. is europe putting tech giants a notice? we will discuss. plus, twitter shares jumped off our conversation with ev williams. we will bring you the interview with the twitter cofounder. it is go time for commercial drones. we will discuss the regulations.
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as american businesses take to the skies. first, european regulators slammed apple with a $14.5 billion tax bill, the largest tax penalty in the eu's three-year crackdown on so-called "sweetheart deals." these are arrangements which a company moves profits to where they're taxed advantageously. in this case, ireland. its corporate tax rate is the lowest in western europe and it has attracted more than 700 u.s. companies to set up shop, including google and facebook. apple employs 6000 people in ireland. in this week's ruling, the eu competition commissioner said that ireland glad to pay an -- allowed apple to pay an effective tax rate of less than down 2.005% in 2014, which gave apple and unfair advantage. here she is in an interview with bloomberg tuesday. >> the tax rate in ireland is 12.5%.
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obviously, most companies, national --nash onlynal or multinational, pay a tiny, tiny fraction of that they themselves have to pay. that is obviously not fair competition. it is not a level playing field emily: we also spoke to the irish finance minister and we will bring you his comments in a moment. but first take a listen to our bloomberg litigation analyst matt larson and alex webb on apple's response. >> a lot of people were surprised about the scale. of the back payment they will have to come up with. apple's defense is they have been on ireland for a long time. this agreement has been in place since 1991. it was always legal.
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they never used any legal loopholes. but the agreement they had with ireland was such that they were perfectly aboveboard with the irish legislation. emily: we also got a letter from tim cook to users, including a picture of steve jobs, that the -- at the first apple factory was in ireland. in 1980 he went and opened a 60% plant in cork. apple, as ever, they always talk about their customers. the letter is to customers, and not journalists. although who are writing the , stories? of course, journals. -- journalists. emily: what are the next steps apple in a legal battle? >> the next steps in the legal battle, apple and ireland will appeal this decision to the european general court in luxembourg. it is the same court hearing the appeals in the starbucks, netherlands investigation and the fiat chrysler case. both of which are significantly smaller, but could give some indication in how the appeals court may take the decision. this whole process is going to take, ballpark, two years to determine. after that, there are for the
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-- further opportunities to appeal to higher courts in europe. it will be quite a while before we get a final decision in any of these cases. emily: alex, leading up to this point, the u.s. has been stepping up its defense of apple, calling the eu a super unnatural tax authority, indicating the are overstepping their bounds. what did we hear from the united states government today? >> they also are not happy. you have to be careful calling them a defense of apple. they are not necessarily interested in stopping apple from paying tax. they are interested in is insuring the tax is paid in the u.s. every dollar that apple pays in tax overseas is deducted from vested double from the taxing me they have to pay in the u.s. should they ever repay trade their funds. -- repatriate their funds. $14 million going to ireland, that is $14.5 billion not going to the irs. emily: we mention that apple is fighting this ruling. ireland is fighting this as well. why wouldn't ireland want to collect $14 billion from the richest country in the world,
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the richest company in the world? we stuck to the irish finance minister earlier, and pointed out that the opposition party in ireland would like to see just that. >> why don't you just accept the money and shut up? 13 billion euros plus interest is a lot of money. >> because as a minister of finance, i have a responsibility of advising the government on these matters. this is a government that a rescued ireland from the verge of bankruptcy from 2011 on. foreign direct investment and the creation of high-level that high-level jobs is fundamental to our economic policies. we stand by our economic policies, and we are going to protect our economic policies. we're not going to get into a situation of short-term gain for long-term damage of the economy. emily: standing his ground there, alex. what kind of long-term damage by we talking about? what have we heard from other tech companies? >> this is, as we heard yesterday, people were saying on a scale from one to 10, 10 being
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extremely damaging, a two to three. but the thing is that ireland has 140,000 people employed by us-led tech companies. the risk is, they start to be put at risk, and it ceases to be the automatically where american countries might go if they go to europe. on the flipside, if you are any other country in europe, ireland is like 180 billion euros in debt from when it's banks were bailed out. so, this $14.5 billion will go toward paying this off. if you are a german citizen you are thinking why should i subsidize apple to have 5.5 thousand jobs in ireland? emily: i know you have been going in the weeds of it on this. looking at the tax structures other companies have, do any of them have similar arrangements? >> a lot of companies make use of ireland -- we consider it the austin, texas of europe. there is a tech community that has been built up there. they have developed favorable tax laws.
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specifically relating to transfer pricing. which is what the whole apple investigation took a look at. as a result, you got a lot of companies that have organizations, subsidiaries set up in ireland that have these transfer pricing arrangements in place. you also have a big contingent of life science pharmaceutical companies. them that hase of significant operations in ireland, both because it is a good place to be, there are favorable tax laws and favorable treatment and how their tax system treats these transfer price agreements. it is a little bit of a warning shot from the european commission and it may encourage some companies to take a second look at whether they have negotiated too sweet of a tax deal, articulate a corporate structures, and how their overall multinational set up is working for them. emily: our conversation with bloomberg intelligence analyst matt larson from washington and
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bloomberg news reporter alex webb covers apple. coming up, our market moving conversations with the ceo and -- ceo of medium and cofounder of twitter. why he says twitter should wait for options for twitter m&a. hospitals are prescribing patient's a healthy dose of virtual reality. we will discuss why vr is becoming a more affordable option for doctors. this is bloomberg. ♪
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emily: evan williams has played a major role in shaping how users express themselves online, from founding blogger in 1999, which he then sold to google a year later. he then went on to start podcasting, and from then, a little side project called twitter was born. he became ceo of twitter and remains on the board of directors. he was not done. in 2012, he started medium for a way to publish. -- published posts longer than twitter's 140 character limit.
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>> medium, for those who don't know, it is a place to write stories and ideas, and it is meant to be open to anyone, and allow anyone who has something to say obsessed to the world to find their audience. it is an update on blogging and social media, but it is focused on things that can be longer. both by amateurs and professionals. everyone from the president in the white house who published on it, to individuals who just have personal stories to tell. emily: president obama, bono, hillary clinton. at the same time, you also have publishers like bill simmons. what do you see is the balance between amateurs, influencers, and publishers? >> we think the mix is really important and makes a conversation better. the entire point of medium, unlike a stand-alone website, if you publish on medium, you are in the mix.
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it is -- your ideas bounce around with other people and you can respond. people can find you. one of our mottos is great ideas can come from anywhere. many professional journalists and creators and writers creating all the time, but especially when it comes to writing, there are tons of individuals that have unique perspectives and valuable ideas, and the ability to articulate them. we offer a place to do that and find your audience. the mix is what makes it work. it is where a business leader can respond, can write something and their customer can respond to them, or vice versa. because there is that diversity of voices, you get much more insight. emily: medium, the experience is beautiful, it is simple and elegant. where are your monetization? how do you maintain that experience and make money at the same time? >> we are working on growing the monetization piece right now. we just started it in the spring after working on the platform
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for a couple of years and making it work for a couple of individuals. we are working on enabling professionals, means getting them paid. we have advertising is part of the product now where brands are publishing on medium and working on the publishing side. some publishers are implementing our subscription program as well, so you can create a membership program for your content. that is looking good, but it's in its early stages. emily: hillary clinton used medium to disclose her vp pick. tim kaine responded on medium. mitt romney explained why he is not running for president. how does that come about? do you have a team of people trying to get hillary to post on medium? what is the play-by-play? >> we have an outreach team in d.c. that is a white glove
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service team. they help get the ball rolling. it has taking on its own momentum. in washington dc, medium has become the default. whether you are in d.c. or active in that world, or has something of substance to say, and you want to find an audience for it, medium has become the default for that. all the major political campaigns are on there, save one, and lots of big commentators. so it has gotten this momentum. people from that world read it. if you have something to say, you go there to say it. emily: it is interesting because these are things that would be published as offense in -- op-eds in traditional newspapers. one person who has not published on medium is donald trump. any effort to get him? >> we are happily open to what he has to say. so far, he has not chosen to expand much beyond his 140 characters in writing. we are happy to add his voice to
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the mix. emily: he has of course taken fine advantage of twitter. [laughter] he seems to express himself in 140 characters. what is it like watching trump takeoff on twitter? >> the same as everybody else, i guess. a mixture of bewilderment and some fear. it has been fascinating, especially the most recent revelation that his tweets -- you can distinguish his tweets from his staff by looking at the source. years ago, when we built in that ability to see the source, meaning the device that it is tweeted from, we did not picture that particular use case for that, but kind of glad that is there. emily: vanity fair had a provocative article, the title was, "silicon valley created donald trump." do you think silicon valley created donald trump, or twitter especially created donald trump? without twitter, donald trump would not be where he is? >> i would hate for us to take
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the credit or the blame for that. i think it is a result largely of our media ecosystem now that has tremendously good and bad things. so, that's -- when i started working on the internet, i was very excited that anyone could put their voice out there, and i really thought, the world is going to be smarter, wiser, more intelligent when the truth is out there unfettered. really, the reason we are still working in this area, i realized it is not as simple as that. the tremendous amount of noise has not made us smarter in many ways, it has made us dumber. there is so much my we have to do to build on top of the system s, and this free flow of information to actually take full advantage of it as a society. we have a lot of work to do. emily: you have had plenty of high-profile tech ceos saying they are against trump.
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where do you stand on that? do you think he would be good or bad for innovation? >> i am firmly against trump. emily: how do you as someone who has built multiple platforms for free speech, how do you balance your own personal political views to your responsibility with the platform? users? with others, with facebook and the trending topics session, where -- section, where they are de-prioritizing conservative stories, which they fervently denied. it's interesting -- >> i will also say, i am not firmly against all republicans. what i am proud of is on twitter and medium, we built platforms that are neutral. we work very hard to give equal sides. on medium, we have many senators, many congresspeople. we have an even mix on both sides. in our outreach team, we employ equal number of people to reach out to on the right and the left. there is nothing in our system
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that biases one side over the other. that has created a very healthy exchange. personally, i read and recommend viewpoints from both sides. because they are on the same platform, again, people are more open to them. emily: we will continue our conversation ahead, asking the twitter cofounder about jack dorsey, and potential twitter m&a. that is next. this is bloomberg. ♪
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emily: back to our conversation with twitter cofounder and medium ceo evan williams. medium has become a platform where amateurs and influencers of all kinds post longer, more in-depth pieces. president obama, bill gates, bono, ford, hbo, just a few examples of people and companies who have used medium to share their thoughts with the world. the founding editor of now bankrupt gawker posted her first story in a heated debate over freedom of the press and where it stops. i asked evan williams in part
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two of our conversation. take a listen. evan: it is a little bit scary for the press, especially if a -- an unknown source of money is fighting you. while i wasn't a fan of everything gawker did, freedom of the press is critical. gawker should prevail in the appeal. it would be a bad thing if random media sites can be taken out for people who don't like what they say. emily: it is an important question that you deal with the scenes a lot -- behind the scenes a lot. what is free speech and what counts as fair? what is going to far? -- what is going too far? since the earliest days of the internet, and when you started blogger, there were trolls. there was online harassment. it seems like nothing has
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changed. evan: it has gotten worse for sure. the early days of the internet, it was a little better and we sort of felt like everybody, it is a big club, and if you are there, you are welcome. to use the metaphor, we had dinner parties with our front door open. if you stopped by, everyone was glad to see you. so much of the internet has evolved with that same default framework. the idea that anyone can join any conversation is not something we expect in the real world. because so many wonderful things come from that online, there is a lot of desire to hold onto that ability, and yet, it causes so much problems when you open it up to the masses. emily: why is it so hard to quiet the trolls? evan: because the line is always fuzzy. when you dig into these issues, it seems much easier from the outside when you look at the details. there is a lot of stuff, a lot of the rhetoric would give you the impression that twitter and other services don't do anything.
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there is a huge team focused on this issue and delete stuff all the time. where it is tricky is where the lines get blurry, and if you have a philosophy of we want to defend free speech, and we want to allow people the principle of free speech, you have to. -- you have to defend speech even if you don't agree with it. even though it is not a legal requirement because twitter is a , private entity, as are all of these other services, it is a value that we hold that people should be able to get out thoughts even if they are unpopular. therefore, there is a judgment call all the time. the policies are evolving. the tools are evolving. it is not a trivial issue. emily: do you think twitter should have taken this on sooner?
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evan: they acknowledgment a couple of years ago. and myself, even from the earliest days, we would have thought about a different architecture for the service had had we known how severe this issue would get. it has gotten worse in terms of the vitriol and the level, and the severity of the attack some suffer. a lot of the architecture of the service of what allows really great things, does allow the bad things. i still think there are things we can do. i met with the team recently working on this. there is a bunch of smart people who are going to be improving this. emily: you are cofounder of twitter, one of the biggest shareholders of twitter, and the biggest champion of twitter. this is a company that had a market cap high of $25 billion and now it is that $13 billion. could it get back to those heights?
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can't make any real statements, being a board number of twitter. i think very abstractly speaking, it is a large service and a valuable service. there will be -- the thing that twitter provides to the world is a real-time information layer, that is incredibly valuable. it can be more valuable. it is a matter of innovation and development. there is not an asset like twitter in the world in terms of the mix of individuals and world leaders, and entertainers, and all the information created on a daily basis. there is so much more that can come out of that. i would say, you know, i am an optimist in general. emily: what is your faith in jack? evan: i fully support jack. emily: i know you can only go so far. we see a lot of m&a.
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do you see twitter remaining an independent company? evan: no comment on that. we are in a strong position right now, i think. as a board member, we got to consider the right options. emily: the last twitter sized medium question -- medium is a complement to twitter, but it is almost the opposite of twitter. it is more in-depth. do you see them as potentially opposites in a way? evan: in a way. part of my reason for working on medium is because, in the few years while twitter grew and facebook evolves, and instagram and all of the social media platforms, it took an increasing amount of attention and energy and innovation of our technology development. they still all talked about nonsocial media. articles, text, journalism was still incredibly important.
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it had not evolved as much. at least online publishing had , not evolved as much over those years. you are right, they are incredibly complementary even though they are different. twitter is more of a distribution vehicle for more substantive content than it is somewhere where you expand on ideas, or offer more complex arguments or stories. twitter and medium are complementary. and that is kind of the reason i wanted to work on it. emily: that was evan williams, twitter cofounder and medium ceo. coming up, some call it a silent revolution. could the adoption of digital health care disrupt the economy?
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we will talk to a veteran health care investor next. if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg radio app or sirius sm. -- serious xm. this is bloomberg. ♪
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♪ emily: welcome back to the best of "bloomberg west," i'm emily chang. it is time now for series a. this week, we spoke to stephen kraus who heads up the firm's health care investing. we began with his thoughts on theranos. a blood testing startup drew application for a diagnostic blood test for the zika virus , after regulators found problems with the way theranos was gathering patient data. this coming after u.s. regulators sanctioned theranos. this is for failing to run laps up to standards. we asked his thoughts on the beleaguered startup. take a listen. you have been investing in the space longer than newer investors.
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i wonder if you seen anything like this? stephen: it is amazing. for someone who cares deeply about putting products and services in the hands of patients and doctors, it is pretty maddening. anyone who is serious as a -- health care investor and entrepreneur enough is enough. , the company had to pull back test results. their ceo has been banned from operating in a lab. they have had partners leave them. now this zika result proves they did not operate the clinical trial well. it is frustrating. it overshadows a lot of the great work that is happening in health care. emily: did she pitch to you? stephen: she did not and if you talked to most health care investors, she really did not pitch to anyone who had health care experience. it is a conundrum. it is a complex industry where you think you would want folks who have health care experience and knowledge on your board. i hope we can talk about a lot of other great promising companies. it is very frustrating and i think it proves if you try to
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put valuations ahead of patients, you're going to get burned. theranos was burned. emily: where do you see potential, let's talk about it. there are a lot of newer investors getting into the space. you have been doing this a long time. stephen: it is a great time in health care. this is an industry for too long has been pretty archaic. it has been way behind other modern industries in terms of technology. i think we are in the 1990's of enterprise software in health care. it is pretty amazing. only five years ago, 50% of doctors did not use software to capture your clinical information. that is shocking. emily: pretty sure my doctor still rides on a notepad. [laughter] stephen: that is a problem and that is changing. your data is nowhere. if you want to manage your health or a population's health and you don't have data in fundamental databases to do analysis on it, you can't really change health care for the better. you can't lower costs or improve
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quality. that is where we are sitting today. you've got 100% of doctors using digital health records. now you can do things happening in other industries like complex data analytics. that can really improve the quality of care and the cost of care. emily: where do you see the most potential for disruption? stephen: i think it is the analytical layer on top of these companies. you have companies like flat iron, or catalyst health that have raised attractive rounds. those are promising companies. i think consumerization of health. there are many things that are happening in the healthcare ecosystem. you see the rise of individual exchanges and you see individuals having to pay $1000 or more. only 10% of, patients had to pay $1000 of deductibles. now it is 50%. individuals are bearing the cost. they want to be involved in the decision-making. they expect it on-demand experiences. like with uber, they want that in health care. i think consumerism and health care is a really interesting place to invest in terms of apps and software. they can help consumers make
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decisions. emily: apple bought a company called glimpse this week in this area. apple has barely scratched the surface. do you think they can become a big player here? stephen: i think apple is making the moves. i think glimpse is really interesting. this concept of a personal health record. we all should want to own our health data, and want to know about health data. the idea of a personal health record has been around for a decade and hasn't taken form. glimpse is a personal health record, and i think apple has the interface and dominant market share with their devices, where maybe the integration of the personal health record can make it a reality for patients and get them involved. i think it is a really interesting foray into health care. emily: how do you see the exit environment for biotech and health tech companies? in comparison to enterprise tech and consumer tech. that is what we often focus on. yet, apple has made an acquisition. ibm has been very acquisitive. what is the environment like right now? they require a lot of money and a lot of capital.
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stephen: they require a lot of capital. when you think about biotech and health care i.t., they are very different. in health care i.t., they look a lot like consumer technology companies. there are innovative technologies that gain scale in the marketplace and then companies like ibm and google and salesforce and apple will come in and acquire them. they have to have exposure to the largest sector of our economy. it is an economic exposure play. the large software companies will make those acquisitions. $40 billion has been spent year to date in acquisitions in health care i.t. pharmaceuticals, it is different. they are earlier stages, they are moon shots. companies have basically outsourced research and development to biotech companies. they are making those acquisitions well. emily: the company you invested in, it was so fascinating and exemplifies what you do. they went public very fast. they are focusing on reproductive technology, where
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there has not been a lot of innovation. talk to me about making it that's on a company like this, where there's so much potential, yet a lot is unproven. stephen: having a child is one of the most important things people can do. ova-science is trying to help couples who face infertility, give them technology that gives them hope to have a child. emily: explain the technology. : the findings was the reverse dogma that there was a thought that women only have a certain number of eggs that deplete overtime. that is not necessarily true. number of eggs in their own -- ovarian pool that depletes overtime. it turns out that that may not be true. the ova science founder found that women have -- the eggs can refurbish and you can harnish that technology to help women become fertile and have a child. i can't imagine a greater company to invest in. the founder is awesome. it is a perfect combination of what we do at venture capital. we invest in a huge dream that changes peoples'lives. how would you not want to invest
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that of a public or private investor? if they are right, it is a huge multimillion dollar opportunity. emily: what is your take on this mylan epipen? controversy/outrage. stephen: outrage. an unfortunate time with kids going back to school. i think it is good the attention has been placed on it. the company has had to react. their stock price has taken a hit. it's a good thing when the markets have morals to them, too. it'd the debate we have to have in society about how we deal with innovative pharmaceutical companies, and how you regulate and allow exclusivity for those likenies, versus a company mylan, which is generic. ova-science should have a greater market exclusivity then mylan should. they should have much greater pricing product. emily: clinton on health care, trump versus --
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clinton on health care, who is better? >> clinton will provide stability in the markets. that is important because you are making long-term bets in public policy involvement. emily: trump versus clinton on -- emily: last question, stem centrex was a recent biotech deal that had huge acquisition for $10.2 billion. is this a deal that traditional vc's missed. how did that happen and how do you make sure we get the next one? stephen: we always make sure we can get the next one. it happens, we missed some from time to time. emily: it was not just you. stephen: it is an interesting area of stem cell technology. it is very early. it is a matchup. if it works, it could prove to be an acquisition. it might be we miss some and we zero. get some. emily: so fascinating. it could be zero yet they are paying $10.2 billion for it? stephen: if it works, it could -- mylan, which is not a very innovative company, produces billions. these are highly profitable companies when you develop a drug and they work. they are multibillion-dollar franchises.
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emily: coming up, cleared for takeoff, the new regulations that could get commercial drones in the air faster. the details, later in the show. this is bloomberg. ♪
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emily: thousands of would-be drone pilots are racing to get licensed under new regulations that went into effect this week. the new rules three companies from having to request special permission from the government for commercial drones use. a process that often took months. more than 3000 people have signed up to take the test so far, and the faa is estimating the number of gun operators will it need -- exceed the nation's 171,000 private pilots in a year. we caught up with a company that provides on-demand drone insurance. >> before you could fly a drone commercially, but you had to get a special exemption and it took quite a while. they streamlined it. you had to be a licensed pilot. now you can do it as a matter of course. you have to get a license, but it is much easier. you just have to pass a knowledge test.
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3000 people signed up to take that test already. it takes about 10 days to get a license going, but once that happens, you should be able to fly pretty much at will after that. there are a few restrictions -- you cannot fly over people, daytime only in low altitude. otherwise, it is really opening up this to a lot more people. emily: what do you like about these new rules? what don't you like about these new rules? >> what i like is that for the first time, you can go to an apple store and buy a phantom 4 and take a test at one of 600 test centers and get vetted, get insurance, and get your certificate to be able to be a remote pilot. and make the money back that it costs you to buy that drone in a number of weeks. that is exciting for the industry. emily: is there any area that
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you wish these rules went farther? or anything that you dislike about them? >> i can tell you what our customers think. they have been talking about their nervousness around the waiver process. almost every provision of this new rule has the ability to submit a waiver online that you should have the right to fly for example, near a certain airport, or beyond individual line of sight, or other types of conditions that are normally prohibited. there are a little bit nervous about how the process will work and how much time it will take. time will tell. emily: talk about rules for hobbyists or the lack thereof? as i understand it, if you are i -- or i want to buy a drone and use it for fun, we don't have any rules to follow. >> yes and no. there are no specific rules, but you are supposed to follow the safety requirements of a community or organization. basically what that means is it is very much similar to this
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commercial rule, you are not supposed to fly over people, go too high, not supposed to go near airports, etc. there are certainly questions about how well that is enforced, and we have seen hundreds of reports of drones flying near planes and whatnot. but, essentially, the rules are very similar. emily: i was speaking to the secretary of transportation anthony foxx last week about this issue, and the fact that rules for hobbyists could go further. what is your take on whether more regulation is needed in that area or what? >> we do not think more regulation is needed. we think more education is needed. really, it is about letting people know what they can or cannot be doing, rather than any form of regulation against them. that seems to be working, by the way, very well, and the industry
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seems to be, before you fly camping, etc., making sure there's material in every box to let people know what they should and should not be doing. emily: take a listen to what secretary foxx had to say about the new rules and what sort of industries they could help open up when it comes to drones. take a listen. secretary foxx: it will open to many more uses that commercial users could put. on the other hand, i think as we have commercial uses, hobbyists, airplanes, the integration of all those different uses into a single system is going to be the most complicated part of this. emily: so, let's talk about jd industries that t this will affect most. there has been talk about agriculture, transportation. what do you see? >> on the ground, what we see is imaging is by far the number one vertical.
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i would be things like real estate photography, event photography, wedding photography. anybody who is a photographer or videographer is basically a drone photographer, and probably will be going out to get a license. the remaining large areas are inspections, and that could be anything from roof inspections, cell tower inspections, any number of things that people inspected with human beings but are more efficient and safely done with the drones. emily: what about amazon? how far off is an amazon drone delivering packages to my doorstep? >> amazon is doing most of its testing in cambridge and the u.k. right now. we don't really know exactly how far they've gotten with it. from a regulatory point of view, there are some stumbling blocks that they and google and others wish i'd gone further, but also the potential to obtain waivers for them. we just have to see how the technology develops and how the process develops around these deliveries. emily: allen, as the person who is reporting on these issues, what do you think is the next
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frontier? the next story, the next development, when it comes to drones and drone regulation? allen: it really does feel we are seeing a critical mass here of change. we are going to see, by the end of the year, rules that will allow drones to directly fly directly over people. it will be relatively simple at first. just covering the drone with foam, so if it falls, it will not hurt anybody. the next step after that i think will be to give broader permission to fly long distances. railroads, power companies, want to be able to find these things miles and miles over infrastructure to inspect them and use video links. once that happens, i really think we will see some tremendous growth, and then after that probably these , deliveries we are talking about. emily: that was verifly ceo jay brackman and bloomberg's allen. coming up, doctors are examining the effective virtual reality on -- effect of virtual reality on
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our minds. how the new technology can help with pain management. this is bloomberg. ♪
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♪ emily: to another technology taking off. forget morphine, hospitals are turning to virtual reality as an effective treatment from everything to intense pain to alzheimer's to depression. with the price of hardware falling vr is offering an , affordable option. ian king takes a look at the effects of virtual reality, and how it could impact our minds. >> virtual reality is a little bit like a spotlight. >> the experience of the mind sort of being in this environment, when it is immersed in this peaceful, positive environment. it is almost like the rest of your experiences are unable to be noticed, because it recruits so much of the brain to focus on that spotlight, that everything outside of that environment
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false to the wayside during that experience of virtual reality. >> cedars-sinai here in l.a. is one of a handful of hospitals experimenting with a surprising new treatment for people suffering from acute pain. i wonder if we could ask you how long you have been here, and what brought you here? >> i have been here for about four days now from chronic back pain. just taking some medications, and possibility of an epidural soon. >> i have an artificial heart. last week, it had a failure. i have been on heart medication for pain for five years. i'm trying to get off of it. >> i am having pain in my left, upper quadrant and my right lower quadrant. it goes into my back. i cannot relax. i have had every test possible. if there was a surgery, i would do it today. >> chronic pain is more than just a physical experience, but it is the biopsychosocial experience.
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virtual reality has a way of affecting people physically, emotionally, and even socially. >> i'm excited to try something different, something new. >> all right. ready? >> every time they sent us a new one, it's a little bit lighter. do you want to go to iceland? i will try that. are you afraid of heights? >> no. >> perfect. >> virtual reality, undoubtedly, has an effect on the human mind. it hijacks the brain and can be used for evil, but it can be used for good. what are you seeing? >> it was like ice formations. it makes you feel like you can grab them. >> honestly, in the 18 years i
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have been practicing medicine, i can't think of anything i have done that is more effective, and you can physically see their body language change. they often will look straight ahead like they are looking at a still image. hermoment that they turn head, that is sort of a magical moment. >> it really is like totally panoramic. >> 360. >> they say at the very least, it does no harm, and has the potential to cut down on the need for drugs like morphine and make patients more relaxed, and have them wanting to go home sooner. >> would this be something you might reach to before morphine? >> i am sure i will try this first, followed by the rest of the stuff. >> in a million years, i never would have thought that they would have brought it to a hospital to use. it really felt like i was there. >> it helps me relax. and when the muscles relax, the pain goes away. >> vr seems to take patients out
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of their pain, at least for a while. but it also seems to take them out of the confines of their hospital beds while they have the headsets on. for those trapped by their condition for long periods, it may be a welcome relief and help mitigate some of the stress of being in a hospital. >> it is kind of like a jail cell, really. i can get out, go around and walk and everything else, but you still end up in this four by 10 room -- 4 x 10 room. >> we need a virtual reality pharmacy. shelves of vr content that is evidence-based, and that i can reach off the shelf and map to my patient's needs. that that we have, the broader the opportunities we had engage patients with virtual reality. this is not about silicon valley entrepreneurs. this is about when and whether we should interact technology with the compelling human experience of eating a -- being a patient. it is not a computing science or an engineering science, it is a social science. emily: that was ian king
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reporting. that does it for this edition of "the best of bloomberg west." we will bring you all the latest intact throughout the week. be sure to tune in wednesday of our special coverage of apple's live event. which announcements can we expect from ceo tim cook? i will take you through the developments at 1 p.m. eastern, 10:00 p.m.'s pacific. continue coverage at 6:00 p.m. eastern. we will see you then. this is bloomberg. ♪
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♪ warnsking trade, the g 20 that protectionism is holding back the world economy. voters turn out in record numbers and hong kong's latest test of anti-china sentiment. liveis "daybreak asia" from bloomberg's asian he

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