tv Bloomberg Technology Bloomberg December 9, 2016 11:00pm-12:01am EST
>> president-elect donald trump name who willo head the interior department. has askedtion team goldman sachs president to lead the national economic council. bobby valentine is reportedly a candidate to be the u.s. ambassador to japan. rudy giuliani is no longer on the short list for secretary of state. he will remain vice-chairman transition team. trump is an baton rouge as a
part of the get out the vote rally for gop candidates. leader mitchty -- thell is resisting major sticking point is benefits for retired miners. a vote is expected this weekend. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. bloomberg technology is next.
caroline: i'm caroline hyde in for emily chang. this is "bloomberg technology." coming up, rupert murdoch gets $14 billion from the television empire he has always longed for. we will analyze the proposed merger. the road ahead for tech in the u.s. with donald trump in the drivers seat. commerce secretary penny pritzker joins us for an exclusive. a real-life robot going to war in a virtual space. we will introduce you to the augmented reality battlefield. first, our lead. 21st century fox has reached a preliminary deal to buy sky for $14.1 billion. shares closed down more than 2%. sky shares closed up 26%. you will remember rupert murdoch owns 29% of sky and has been trying to increase his stake for years.
joining us for more on this deal is alex sherman. thank you for joining us. i remember six years ago when this deal first emerged because there was concerns about the phone hacking scandal that embroiled rupert murdoch then. why is sky such a tasty asset? alex: it is a little different today than six years ago and did not when the world of the news scandal hit. sky is consolidated but other assets in other countries like italy and germany. sky is both a content distributor and also a content creator. fox is now deciding to buy the other 61% it does not already own. in a similar transaction to at&t buying time warner. it puts together more content and distribution. the only difference is fox already owned a minority stake
and it is an international transaction. it increased the heft of fox. viacom and cbs are now having discussions. it seems to be a trend if you are a media company that you need more scale and want to get bigger. caroline: content is clearly king. it looks pretty tasty at what they are offering. because of the british pound slump, it is a good time for getting in for 21st century fox. what are the other catalysts? alex: one is brexit. this is a bet that brexit will not be a collapsing event for europe, similar to say when warren buffett invested in the united states after the financial crisis. two, the market rise from the trump rally has given fox a sense of doing this deal now will probably not collapse their own share.
three is that at&t and time warner deal. i think that took time warner off the table for fox. fox put out a hostile offer to buy time warner and now they are all the table so they can move their attention away from that. sky was the obvious thing. fox has been fairly public about saying owning only 39% was not really a long-term relationship. they were either going to buy the rest of it or sell off completely. it was like they will buy the rest of it. caroline: alex sherman, great to have you with us. turning to president-elect donald trump's new administration -- after tough talk on the campaign trail, these a concern and diplomatic tension with china, many leaders in silicon valley are wondering what will be the impact of their policies on tech? what better to talk about the legacy of the current
administration and what the future would hold than secretary of commerce penny pritzker. and from new york, one of the most connected guys in tech, david kirkpatrick. welcome to the show. penny, we want to start with you, secretary. thank you for joining us. obama was a pretty digital president, trying to build bridges between washington and silicon valley. we spoke to you last -- is this always a positive thing and is that sort of relationship certain for the new administration? sec. pritzker: it is absolutely positive. it is essential. president obama recognized from the beginning the importance of the digital economy and the importance of technology and innovation. we have engaged to be a real
partners with the leaders of the businesses in that area. we have developed digital policy to ensure there is a free and open internet. we have been working on trust online to make sure the privacy and security policies work for both the security of our country, individual consumers as well as the businesses. we have been trying to make sure there is broadband access for all americans which is essential to be effective. we have been focused on the workforce that can use the tools that have been created but prepared to work in the businesses. finally, we have engaged with companies, which brings me out here to san francisco, with companies that are working on new technologies to better understand what they are trying to accomplish an interface with the federal government. caroline: we have to bring out you, david, because you have
many a viewpoint about what may be the next legacy. what does donald trump bring to the table. i'm sure you have plenty of questions for penny. david: great to be here with you. it is so clear under the obama administration, and much of it has been your leadership, there has been recognition that technology and silicon valley internet industry is one of the great flagship industries, the greatest american flagship industry globally. a real relationship has been built to show washington finally recognizes that. how robust do you think that relationship is going to be in the next four years? sec. pritzker: what we have tried to do is institutionalize the relationship between the department of commerce and the technology community. they understand the tools that
we have in place and how we can be their ally in government policymaking, not just here in the u.s., but a lot of policy that can affect the free and open internet that is going on, negative implications around the world. it is important that we stay engaged. we have tried to institutionalize that in a number of ways. first of all, through formal boards we have. we have a data advisory board. that is where we have private sector members that are giving us feedback on a regular basis. we are also spending a lot of time in the communities. we have put in place digital attaches in 12 different countries around the world so that we can help our tech companies better navigate the digital challenges that they are seeing. whether it is through the china, brazil, india communities. we have tried to put into place tools, institutionalize the relationships. recognizing that the economy has gone digital. i'm not sure what a digital
economy is. i think it is the economy and technology is emerging. david: how much are those advisory bodies and digital attaches really institutionalize -- we have heard a lot about what could happen and people are concerned. how institutionalized are those things that you are confident they can continue? sec. pritzker: i think the next administration, as best as we can understand from the transition teams we are working with, understand the importance of that engagement and want to continue it. exactly what the policies will be, i cannot comment. i think they appreciate the importance of the relationship. caroline: give us a sense of whether some of the powerhouses of silicon valley have become too powerful. they seem to be growing in discussion, whether it is about
fake news, terrorist related pictures and videos. how has there been too much regulatory open arms for these companies? sec. pritzker: i think collaboration is very important. let me focus on one area. cyber security -- we have put out the cyber security commission report last friday which is something i encourage anybody in the tech community to take a look at. it calls for greater engagement as it relates to addressing cyber security. i know some people get concerned about engagement between our companies and the government, but it is very important to protect individuals, their privacy as well as a national security. we need to define safe mechanisms that we can work together. caroline: what about the global regulatory picture? in the eu, we have seen a lot of activity coming in what has perhaps not always the most welcoming of arms.
do you discuss such regulatory moves by the eu? sec. pritzker: absolutely. the privacy shield that we negotiated was a replacement for what used to be safe harbor. it is a way we can mesh our two different privacy regimes in europe and the united states so that $290 billion of digital trade can continue and continue to grow. absolutely, we are in the conversation every day with our counterparts in europe. sometimes yes, sometimes no. the point is if we don't engage with that and not talking about the implications -- they want to continue to enhance their own innovative society. we talk about what policies and what implications of different policies. we have to remember we are dealing with a lot of innovation going on very quickly. governments are not always at the forefront of that. we are often behind the curve. it is important that as
governments -- look, i am from the private sector, that is my background -- it is important that governments understand the implications of the steps they take. they have one goal and may have unintended consequences. that is where it is really important to have a dialogue not just between the eu and the u.s., but it is important the private sectors as well to give their viewpoints as to what different sets of the implications are for different companies. david: what do you think about president-elect trump's pick for your replacement, wilbur ross, and are you doing anything to help make that transition happen already? is there any discussion underway? second of all, there is so much talk about protectionism. i hope you can talk about that before you go. sec. pritzker: let me start with the designee for secretary of
commerce. i reached out to him and he said we will be in contact. i have written a letter that i will share with him when i need him telling them -- meet him telling him the things i wish i was told i took the job. absolutely, transition is underway. president obama asked us to do the most professional transition in history and we are very focused on that and working well with the transition team coming after us. caroline: i have to ask you -- we have seen many people who have come from government take up shop here. condoleezza rice at dropbox. potential for a job in silicon valley? what is next? sec. pritzker: i would like to go back to the private sector, but obviously i have not been able to figure that out while in this job because it creates too many conflicts. i look forward to many possibilities. caroline: last question, david? david: i want to thank you for
joining us. i guess i would like you to briefly touch on the protectionism issue because it is so much in the rhetoric of the incoming administration. i know you have worked so hard for a more open attitude. can you talk about that a little? sec. pritzker: i think the united states cannot close itself off to trade. we are only 5% of the customers in the world, 95% are outside the united states. if we act in a protectionist manner, what i have been told by my counterparts around the world, they will have to retaliate. that is not a good cycle to get in. that is a negative cycle. it is important we figure out a way to engage where we improve the ability and the opportunity for the average american which i think with the president-elect is focused on. he wants more of our goods made here and bought here which is a good aspiration. we just need to figure out how
to do that in a way where we are not putting up a barricade around our country, but instead engaging with the rest of the world. caroline: you have just come from mexico. we were with the u.s. trade and commerce. what was the dialogue like? sec. pritzker: i was optimistic by the attitude of the mexican government. they are very mature and they realized that engagement is important. they recognize that nafta is an agreement that was made 22 years ago. they know there are enhancements that can be made. we negotiated a number of those enhancements in tpp. there is opportunity to improve the engagement. the business leaders there are nervous because it is unclear how things will proceed. but, my hope is that there will be time when the folks are in place and the new administration
is in place to really sit down and talk specifics about how to continue to grow the over $600 billion of trade we do back and forth with mexico. 40% of what the igo exports are on their -- of what mexico exports are american-made content. we have to figure out how to make it better. caroline: it seems to be an ongoing discussion worldwide between the eu, u.k. and the u.s. and mexico. it has been wonderful having your time. we wish you all the best in the rest of your remaining days in office. thank you very much. and, david kirkpatrick. still to come, innovation in drones flying faster than the rules can govern it. what can be expect under a new transportation secretary, next. ♪
caroline: turning to the skies. a government watchdog report found that aviation regulators have approved drone applications quickly, in some cases missing safety violations. an example of how the department of transportation has its oversight over the drone industry. joining us in new york to discuss is drone regulation expert greg mcneal. wonderful to have you on the show. first of all, you have written some incredible pieces talking about the future of airspace. perhaps we should not be thinking about automated cars, but automated aircraft. would we be carried in these things? greg: we believe in a future that eventually you would be going out and instead of hailing an uber, a vehicle will come and you will fly to your destination. one thing that we say if you can deliver a package, you can deliver a person.
we believe in that. to get to that future, we need systems of automation that will allow this to happen. i think that is part of the challenge dot will face, one part automation and reform. caroline: the current administration has been trying to tackle the automation situation. what do you think of the new nominee for the position in transportation? what do you think about the future? greg: most of us in the future are very bullish on the appointment of elaine chao. she brings a lot of experience. she has a willingness to discuss legacies and ways of thinking about problems and pause for a
second and say is that necessary to be a reform? she did this in her prior jobs. we think she will do this in her future position, helping us reform our traffic control and find ways of automation that will not only help industry succeed but may make the airspace more safe. caroline: talk to me on a global perspective because when i look at the u.s. when it comes to regulations, i saw amazon having to go to the united kingdom where i come from and canada having to test its drone because regulation cannot keep up. is the u.s. becoming a more welcoming place? greg: there is an amazing amount of global commercial arbitrage going on across jurisdictions. for a while, companies were criticizing the u.s. for being behind europe and canada and the new regulations came out over the summer.
the faa administrator said it is america's goal to lead regulations on the unmanned aircraft space. canada would reform the regulations. australia is in the process of reforming the regulations. europe is in the process of reforming their regulations. it is a wonderful competition among companies and jurisdictions who are trying to be first to have unmanned traffic management systems where drones can fly autonomously. it is something that is very exciting. i think that is why we are seeing so much investment in the space. caroline: and we will see that investment potentially fly as we see companies accelerate in the area. thank you very much, greg mcneal. more "bloomberg technology" coming up next. ♪
caroline: president obama has ordered an investigation into hacking attacks related to the 2016 presidential election. the report will be provided to congress, but not necessarily made public. for a look of the impact hacking may have had. cloud strike has confirmed the role of russian hackers in this year's dnc hack. president-elect trump has expressed some skepticism about the country's involvement. michigan now has the first set of statewide car driving rules. the law allows the creation of a network of on demand autonomous vehicles. only motor vehicle manufacturers are allowed to operate such networks. that means uber and google cannot do this. chrysler and fiat can. a reminder that all episodes of "bloomberg technology" are live streaming on twitter. check us out on bloomberg tech tv weekdays at 5 p.m. in new york and 2 p.m. in san francisco.
>> you are watching "bloomberg technology." now a check of first word news. >> donald trump is stumping for a candidate in the final senate race. and a new era in the oil and energy sectors. >> our plan begins with reform to create millions of really good paying jobs. and we will see refineries and pipelines and a lot of things happening. courtney: he also said there would be consequences for companies that leave the country and try to ship products back into the u.s. the decision by the top leader in hong kong not to seek another
term could clear the field for a chief executive and could bridge differences with china. the chief executive is stepping aside at the end of his five-year term because of family concerns. and the u.s. bracing for uncertainty in south korea after the impeachment of their president. the lawmakers, including dozens from her own party, voted overwhelmingly to remove her from office. she was the first female leader of that country. she offered an apology. >> this afternoon, the congress passed the impeachment motion. i apologize to citizens for creating national confusion among security and economic concerns, due to my carelessness. courtney: the prime minister is assuming leadership. and hundreds of civilians
fleeing aleppo today in the wake of shelling by government troops. the u.n. says they are concerned about reports that hundreds have gone missing after crossing into government controlled areas. 100,000 civilians are estimated to be under the control of the opposition groups. and a new report in the systemic russian doping has detailed conspiracy, involving more than 1000 athletes across more than 30 sports. the report from the world anti-doping agency includes evidence corroborating large-scale sample swapping in the 2014 sochi olympics. the russian ministry has denied any doping. and rats outnumber people in paris. officials have closed some parks and trash bins are being redesigned to keep the rats out. and former u.s. senator john glenn will lie in state in ohio and a memorial service is also being planned. his funeral will take place at arlington national cemetery.
he died yesterday at the age of 95. global news, 24 hours a day, powered by more than 2600 journalists, in over 120 countries. i'm courtney collins. ♪ caroline: this is "bloomberg technology." i am caroline hyde. investing $50 billion, a way that they are crying foul -- no shortage of of tech news this week. we go to technology coverage with brad --. looking at new york, we have the chief executive of tech-conomy, david kirkpatrick. let's start with softbank which paid $50 billion -- where could this money be flowing? >> he is a smart man and has
provided a model for what technology executives should do in his meeting with donald trump. he had already committed to raising and spending $100 billion on technology, obviously half of it would go to startups. he meets with donald trump and does a conference in the lobby of trump tower, commits half of the money with no specifics and promises jobs. nobody will ever return to it. and stocks go through the roof, because people predict he could have a clear path for sprint and t-mobile. a great move. i do not know if there is substance. caroline: david, and this is interesting -- sprint moving and also movement in germany.
and shares of -- up. there is a lot of hope, but is -- going to have a clear path? >> there is good reason to see that antitrust enforcement should be more understanding under a trump administration, but what will happen under that administration remains everybody's guess. it is a little bit humorous and going back to what you said, advocating that tech leaders, maybe business leaders generally need to start opting for reality tv approaches to their own behavior, which is effectively what he has done. coming out in a theatrical way, saying something he had already said elsewhere. it was not really new. it plays the game that we are essentially playing, i guess, in the public life. i am not sure how it will help the tech industry advance, but it is a shrewd strategy. caroline: playing that game. it will be played all this week. we have executives coming over
to trump tower, what do you expect and who? >> i think they will all be going. this is the world we live in. i do not think you can say no to the president-elect. if you are looking at the playbook, you are thinking -- caroline: maybe now. >> maybe i talk about bringing manufacturing back into the u.s., having some announcement, whether it is real or not. we know the ceo of cisco is going, and of oracle. it will be interesting if we see anybody from google or amazon, two executives who took stands against donald trump and now they need to work with them. the president-elect is somebody that can prosecute grudges, so they should go and listen and offer something that fits into the agenda. caroline: interesting. we could go -- david, you know that facebook, do you think mark zuckerberg will be tempted? >> i think if you are summoned,
you will probably go. i would diverge from that. i think if able listen, whether they listen, whether they want to or not, they will. i think he will talk about security, fighting terrorism, and what they will do to open networks when requested, which a number of companies have showed resistance to and there is concern on the part of the customers on what they could agree to. but delivering on the anti-terrorism is what donald trump promised repeatedly during the campaign. i know it has to be on his line in this meeting. caroline: brad, are they looking at regulatory hurdles that could be getting in the way of these companies growing? is that reflected by investors?
>> it is tough to say. we saw weakness in the amazon share price the first week people were thinking the new regime would be difficult for tech companies, but so much else is happening and it has obviously done well. it has been a good holiday season for some companies, so it is hard to say. caroline: he has started to change his tune from his bark, perhaps worse than his bite. now investors worried about the board and whether they will be on the side of the shareholders or on the side of mark zuckerberg. tell us about andreeseen and whether these concerns are something that should be listened to? david: we saw released through a lawsuit, evocative text messages between mark zuckerberg and marc andreeseen, happening while mark zuckerberg was talking to a board that was attempting to represent outside interests.
when he was attempting to change the structure of its own stock if he was to give away his stock to his philanthropy. and andreeseen was coaching him to convince the others. the interesting part of it was the suggestion that mark zuckerberg was trying to get -- if he goes into government. it is intriguing that that would be the one exemption that he should have asked for. it comes as a surprise to me to think that he would think of a thing, because it is so evident that he wants to stay at facebook for the duration. certainly andreessen is getting sued and that is not a good thing. caroline: how much of this story is complicated?
>> basically, mark zuckerberg is working with the committee that is supposed to represent board members. and it turned out that we had text messages we see because of the lawsuit that he had a back channel, helping mark zuckerberg completely with the negotiations when he should've been representing the shareholders. i think it goes to a trend where the board members and venture capitalists are falling over themselves to be founder friendly and they are getting deals and power because of the attitude, but we see it can hurt the shareholders. so some of these companies where the founders have gotten out of control, it has hurt the community and investors. caroline: david, does mark zuckerberg care? >> he cares about his image. i actually do not think shareholders were hurt by this.
i think i sadly disagree with a friend, brad. i do not think necessarily what he did was even so terrible. i think it is embarrassing. the shareholders should thank of their stars that mark zuckerberg is who he is, he has given them unbelievable value and will certainly continue to do so. brad: i was not saying that the facebook shareholders were hurt, this is the kind of behavior that disenfranchises investors and in the context of another company where you do not have someone like mark zuckerberg, this is activity that is not representing the little guys. david: the reality is, many of these boards are comprised by people that were hand-picked by these founders and whose job is to support them and i am not even sure considering that, despite the fact it is a public
company, that looking at those texts, it is inappropriate, i think. caroline: we like the debate. thank you. and the chief executive of techonomy is staying with me. another story we are watching, once again king, the major french phone company going into talks to purchase the now -- canal plus. and what is the industry trend with traditional pay companies? no structure and they could agree to a partnership, with orange interested in poland and africa, also expanding itself as competition waves in france. coming up, one u.k. startup is
and when you're there to implement it, it is a good feeling. >> a u.k.-based startup is creating a new platform called mekamon. it combines robots with augmented reality. >> growing up in nigeria, i was inspired by wildlife. and japanese designs and all of that coming together -- the better the robot can move, the better it can interact with the world around it. there are things taken from nature. if you look at spider legs, they can change direction quite quickly. >> we are moving it around. why do we need a little carpet square? >> that is where we are building
the world from. from rubble. >> they take it one step further by putting real-life robots into virtual game space. >> that is the robot taking a hit. it is a virtual opponent. >> i fight back? >> yes. gone will be the days of overlaying images. you should look at the world you are in and adapt to it. >> so, telling us we have one. >> yes. and getting ready for the next challenge. my robot does different things and interacting with virtual opponents and other robots. take it for a spin. we can have a battle. >> now the augmented reality function only works in single player mode. and actual robots can battle in real life.
>> bring it on. [inaudible] >> we are firing? >> yes. [laughter] brilliant. >> good game. >> in 2017, a limited number of these mechanical wonders will be available for purchase. perhaps finally delivering affordable robot carnage. caroline: now may be i am tempted toward that were christmas. sticking with robotics, we live in a world where some may be experiencing automation anxiety, caused by expectations of an era would robots will do all the work could believe humans pretty bored. automation has already erased jobs in america and is threatening transportation, warehouse work and routine white-collar work.
even journalists seem to have the writing done for our articles from robots now, so maybe you are wondering, what will exist in the future? rebecca green building is with us as well as -- is with us as well as david kirkpatrick. this is fascinating. break it down, rebecca, the scale of jobs that have already disappeared in manufacturing and why potentially the jobs donald trump is promising could be a figment of his imagination? >> you look at 88% of the jobs lost in manufacturing since the peak of manufacturing has been because of automation. antitrade has taken some of those -- and trade has taken some of those jobs. and now robots are doing things cheaper and you need humans to build the robots. at the same time, america has become much more productive and
we are the second largest manufacturing country in the world. caroline: david, time in. -- chime in. there is a worry about jobs and the future with uber and airbnb and the fact that maybe people will be as necessary as they were. david: this is probably becoming the single most fraught issue in technology and i think it is connected to the political environment, because even if people have not seen their jobs replaced by automation, they sent it is likely. with everybody having a smartphone and sensing how amazing it is and having facebook and google and amazon with her echo devices, they realize that artificial intelligence is around them and it has power and it has had an impact in industry. i remember the first time i rode on a train at the airport.
and that was 10 years ago. no driver. that was the beginning of something that continues and will continue. the question is, how will we respond to it? rebecca has done some writing about that. but the answers are tough on how we should respond as a nation and a world. caroline: so donald trump responding to this and see that may be manufacturing is maybe not the place where you build up the jobs numbers, so where can he expand? rebecca: if you think about it, please is -- jobs that robots are bad at. or places where you need empathy or human connection. many jobs involve that, nursing, home health aides, physical therapists, and those range in what they pay obviously, but even within the business world companies are saying that the so-called noncognitive skills are becoming more important, because it could replace some of
the stuff we do in the workplace, but you need people to work across teams. so we need to focus on those skills, which donald trump has not mentioned. caroline: david, are the tech giants starting to vocalize this? are we hearing about what the utopia could be, everybody working a little less hard? what kind of future can they paint so that people are not as people -- fearful, not only here but across europe? david: i think it is possible to say things that are promising, but the problem is a lot of the jobs that could be created in this world that rebecca is talking about, which i agree with, will not necessarily be able to be performed by those whose jobs are lost in the factories, but he different kind
of person and may those people do not want to be trained for that. even if they did, we do not have those training systems in our country very well developed. i worry about that. but i think there are some problems. we just published an article about the trusted advisor, the new kind of job one of our writers has suggested will come into existence as more information is assembled around the planet. remo advisors could be tapping into data and telling us how to better live our lives. it could be a new category entirely. caroline: fascinating. something more we need to be digging into. david and rebecca, thank you. i urge you to go to bloomberg.com and read rebecca's story. we're bringing you the best interviews from the week. including a conversation with arianna huffington. and she will be talking about
caroline: in this edition of out of this world, japan watching supplies to the international space station. the rocket was destroyed last week, shortly after liftoff. it was providing supplies. it will arrive on tuesday. and in san francisco, working with tech leaders to fight homelessness. it has been made worse by surging housing costs. the mayor says they plan to match $10 million in donations.