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EARLY START

AT&T Agrees to Buy DirecTV; MERS Virus Spreads in the U.S.; Terror in Nigeria: New Threat

Aired May 19, 2014 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN ANCHOR: A very big deal in business. A major media merger that could affect how you use the Internet and how you watch television. AT&T paying nearly $50 billion to buy DirecTV, 30 million U.S. customers could feel the effects of this deal. We're breaking down what it means for you.

JOHN BERMAN, CNN ANCHOR: A rare deadly virus spreading in the United States for the first time. A third case of MERS diagnosed. And this patient, this time, didn't contract the disease from some exotic overseas vacation. No, it was a Midwest business meeting. We'll have the very latest ahead.

ROMANS: Happening now: a new threat from the terror group responsible for kidnapping hundreds of schoolgirls in Nigeria. We're live with who they're targeting now.

BERMAN: Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS: I'm Christine Romans.

Thirty-two minutes past the hour. Our top story this morning, a big deal in business. AT&T buying DirecTV. A merger that will that affect 25 million customers. The price tag, nearly $50 billion with a "B." That will put it as the second largest provider in the country behind Comcast.

Now, remember, Comcast announced it would buy Time Warner Cable for $35 billion. That was just three months ago. That deal still waiting on regulatory approval. Regulators scrutinizing these deals to make sure they don't decrease competition or hurt customers.

A sentiment echoed by proponents of the open Internet.

(BEGIN VIDEO CLIP)

MICHAEL WEINBERG, VICE PRESIDENT, PUBLIC KNOWLEDGE: I think buyers should be very aware when it comes to this merger not only could it affect their current plan and their current offerings, but it means it's one less place for new offerings, for new kinds of models to come from.

(END VIDEO CLIP)

ROMANS: The AT&T CEO Randall Stephenson says a merged company will improve customer choice. He says the deal will, quote, "offer new bundles and deliver content to customers across multiple screens -- mobile, TV, laptops, cars, even airplanes."

Meantime, we could see even more deals in the future. Softbank, the company that owns Sprint, it's courting T-Mobile.

BERMAN: It's going to change the way I watch TV.

ROMANS: I don't know about that, one place, voice, data, home security, TV all in one house. AT&T technically could get more revenue per customer and get more choices.

BERMAN: I can still watch TV on the couch with my feet up and a beer?

ROMANS: Well, the one that has the tube in it, you have to get rid of that.

(CROSSTALK)

BERMAN: Very good.

Thirty-four minutes after the hour.

Some serious medical news here. Health officials have identified the first case of Middle East respiratory syndrome believed to be transmitted inside the United States. Two earlier cases of this potentially deadly virus had been contracted overseas. Officials say the latest victim came in a close contact with a man who was diagnosed after returning from Saudi Arabia. A blood test confirmed the infection. The man suffered only mild symptoms, luckily. The disease can be fatal, up to one-third of the cases of a very high mortality rate.

Breaking overnight, the president of South Korea disbanding her nation's coast guard and reorganizing her government. This over last month's tragic ferry disaster there. The president says South Korea owes it to hundreds of students who died and apologizing for the coast guard's bungling of the rescue operation as more and more South Koreans are calling on her to resign.

Let's bring in Paula Hancocks live in Seoul this morning.

Paula, what can you tell us about this remarkable apology and reorganization?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, John, it was a tearful apology towards the end when President Park Geun-hye was talking about the people that she called the heroes of our generation. These are the people, the passengers and the crews who lost their lives to save others. But, of course, she also slammed the coast guard saying more should have been done, saying they failed to try and rescue as many people as possible. Critics across the country have been asking why the coast guard didn't manage to save more passengers as that ship sank. And they're asking why the crew and captain were able to be saved but not more passengers. Let's listen to the president.

(BEGIN VIDEO CLIP)

PRESIDENT PARK GEUN-HYE, SOUTH KOREA (through translator): The coast guard failed in its duty to carry out the rescue operation. The reason is because of the structure. Since it was created, it's concentrate on investigation and external growth and have neglected search and rescue tasks.

(END VIDEO CLIP)

HANCOCKS: So, she said there was a fundamental flaw within the Coast Guard itself. But bear in mind, the search is still ongoing. There are still 18 people missing in those frigid waters of the Yellow Sea. That search is ongoing right now.

And what the president has been saying is that the search operation will continue, of course. Nothing will change in that regard. And there will be a new department, a new safety agency that will oversee that. The investigation itself and all of the information coming as of this search operation will go through the police.

So, she has apologized saying not enough was done. There were serious flaws not only from the coast guard but also the government itself. Was there too cozy a relationship between the government agencies and the shipping industry -- John.

BERMAN: All right. Paula Hancocks from Seoul, thank you so much for that.

ROMANS: There's an ominous new kidnapping threat against school children in Nigeria. In a letter, the Boko Haram terror organization is targeting an all-boys secondary school now. Nigerian police ordered to beef security at all boarding schools in the region.

Meanwhile, no progress reported in the search for more than 200 schoolgirls abducted last month.

Let's bring in Vladimir Duthiers live from Nigeria's capital city, Abuja.

Let's talk about this new threat, this letter, promise to Boko Haram, promising to target a boys school. I mean, they're going full force on his terror campaign against education, Vlad.

VLAD DUTHIERS, CNN CORRESPONDENT: That's right, Christine. In fact, Boko Haram in the past typically sends out letters to towns, to villages, to schools prior to an attack. That's why people are wondering why the Nigerian military is not able to stop them. They've been attacking these facilities with impunity since 2009 and doesn't seem to be ending anytime soon. In fact, Christine, last February, they attacked a boys school. During that attack, they killed over 40 boys. In that instance, rather than abducting the girls, they told them to go home, get married and stay out of school. Boko Haram obviously meaning Western education is a sin.

But I spoke yesterday to a mother, and I asked her if your daughter comes home will she be able to go back to school. She said education is the most important thing for her. God willing, her daughter comes home, she's going right back to school, Christine.

ROMANS: Vlad, in terms of finding these girls we're where we were last week, they don't know is where they are?

DUTHIERS: Absolutely no idea. Even the President Goodluck Jonathan of Nigeria saying although he has 20,000 troops in the north eastern part of the country, presumably, some portion of those troops are looking for these girls with the assistance of the United States, France, Great Britain. But he really admitted that he has no idea where they are. And now, with U.S. intel suggesting some of those girls, we know we saw 100 of those girls or so in the video released by Boko Haram. But it leaves another 100-plus still missing.

U.S. intel report saying those girls may have been split up in neighboring Cameroon, Chad or Niger. There's a multiregional platform now in place with all these African countries deciding to do something to stop Boko Haram, but it doesn't look like these girls are coming home anytime soon, Christine, unfortunately.

ROMANS: Vladimir Duthiers, thanks for that this morning from Abuja.

BERMAN: Thirty-nine minutes after the hour right now.

The San Diego wildfires contained this morning. Evacuated residents return to their homes but now California's governor is warning of a new fire threat that could be here to stay. We'll have that story, next.

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BERMAN: Welcome back, everyone.

Firefighters in San Diego finally getting upper hand on a slew of fires that left dozens of homes and ashes and forced thousands there to evacuate. Temperatures cooled and winds died down this weekend, but not before 26,000 acres had burned.

California Governor Jerry Brown fearing the state's drought means a long and dangerous fire season ahead.

(BEGIN VIDEO CLIP)

GOV. JERRY BROWN (D), CALIFORNIA: We're ahead of the curve, but is that curve of dryness and fires, disasters continues to escalate? We're going to have to deploy more resources.

(END VIDEO CLIP)

BERMAN: So far, in 2014, the California Department of Forestry and Fire Protection has responded to more than 1,500 fires. There are usually 800 fires in an entire year.

ROMANS: All right. We're hearing this morning from the whistle- blower who triggered a federal investigation at the V.A. clinic in Ft. Collins, Colorado. Lisa Lee, a former Navy reservist, said she was suspended without pay for two weeks for refusing to cook the books to bring up long treatment for patients.

A top aide said President Obama is madder than hell about the scandal. Treatment delays have been -- may have caused dozens of deaths in Phoenix and widespread cover-ups are being alleged at V.A. facilities around the country.

BERMAN: When it comes to 2016, Hillary Clinton's health and age are fair game, that's according to prominent Republicans speaking out on Sunday. Karl Rove saying he stands by his comments about Mrs. Clinton's 2012 concussion, saying it's a legitimate issue if she chooses to run for president.

RNC president Reince Priebus seconded that emotion.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, RNC CHAIRMAN: Health and age is fair game. It's fair game for Ronald Reagan. It's fair game for John McCain. I think the month of important reason for me as leader of this party is what's the record of Hillary Clinton? What was her record as secretary of state, Benghazi, Boko Haram, you know, Syria, Russia -- those are going to be the issues.

(END VIDEO CLIP)

BERMAN: Last week, former President Bill Clinton came to his wife's defense, but he did say it took her six months to get over the concussion incident. At the time, the former secretary of state was out of public sight for just about 30 days. Democrats say the Republicans are afraid of facing Hillary Clinton in 2016.

ROMANS: Right.

According to the "The New York Times," General Motors is investigating its own legal department for the botched handling of an ignition defect linked to 13 deaths. G.M. reportedly knew of the defect for over a decade but only issued a $2.6 million vehicle recall in February. Federal regulators fought the automaker with a $35 million fine for that last week. More punishments are very, very likely on the way.

BERMAN: This morning, a whole lot of eyes will be on the graduation of Wake Forest, because Jill Abramson, the now fired executive editor of "The New York Times", will deliver the commencement of the graduation address. Now, it is not clear whether she will respond to reports that she was dismissed after finding out she made less money than her male predecessor. There are reports that that happened. "The New York Times" says not the case.

Meanwhile, the newspaper's publisher is going public with his reason for the high-profile.

Alexandra Field has more.

(BEGIN VIDEOTAPE)

ALEXANDRA FIELD, CNN CORRESPONDENT: "The New York Times" is fighting back with a statement from publisher Arthur Sulzberger Jr. And in it, he points to some very specific reasons for why he says Jill Abramson was dismissed. He points out her, quote, "arbitrary decision making, failure to consult and bring colleagues with her" and her, quote, "inadequate communication."

Sulzberger goes on to say that in her final year on the job, Abramson's total compensation package was 10 percent higher than her predecessor Bill Keller.

The point of this lengthy released over the weekend was for Sulzberger to try and underscore two points he Abramson's dismissal had nothing to do with pay or gender, here's part of his statement, quote, "Perhaps the saddest outcome of my decision to replace Jill Abramson as executive editor of "The New York Times" is that it has been cast by many as an example of the unequal treatment of women in the workplace."

Initially, "The Times" said Abramson's dismissal had to deal with a management issue. So, why are they going to so much detail now? Well, we spoke to another female media executive, Sharon Waxman, the founder of thewrap.com, she says "The Times" took this risk because implications of sex discrimination are just too damaging in this kind of environment.

SHARON WAXMAN, EDITOR-IN-CHIEF, THEWRAP: The publisher of "The New York Times" is so worried as being regarded as a sexist that he's willing to take the risk of legal liability here by detailing how terrible a manager Jill Abramson was.

FIELD: Abramson has the first female executive editor of "The New York Times." Her dismissal has left other journalists asking why there aren't more women in the top of this field. That's the subject of an article on politico.com called "Editing While Female." And it's fueling a lot of debate about the industry.

WAXMAN: I think that we're talking about Jill Abramson because she seems to symbolize something broader that's going on in the gender politics among high achieving women in our society. We're worried that there are not enough women. We're worried there are not opportunities for women to rise to the top.

FIELD: Of course, everyone is waiting to see what Jill Abramson has to say. She hasn't spoken publicly yet. But she is scheduled to give the commencement address at Wake Forest later this morning -- Christine, John.

(END VIDEOTAPE)

BERMAN: Another reason we're talking about this is how "The New York Times" handled it.

ROMANS: Or mishandled it.

BERMAN: Exactly. There are people saying, you know, Harvard Business School, teach classes for generations about how not to fire people the way "The New York Times" just did.

ROMANS: It's interesting, too, because some people write this is an inside baseball media story. I was at a soccer game this weekend on the sidelines people from all different industries are talking about this. They were talking about this story. So --

BERMAN: Everyone wants to know the truth.

ROMANS: I guess so.

All right. Happening right now, severe flooding across Serbia. Dozens are already dead. Thousands evacuated from their homes and now, a new threat from land mines. We're live with the very latest.

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ROMANS: This morning, four people are under arrest in connection with last week's deadly coal mine fire in Turkey. The country's semi official news agency has identified them as the mining company's operating manager security chief and two engineers. The government says search efforts are now over, 301 people confirmed dead. The investigation into the cause is under way.

BERMAN: Unprecedented flooding forcing thousands to flee for safety in the Balkans. Look at these pictures. Dozens of people have already died. Relentless rainfall in Serbia and Bosnia triggering more than 3,000 landslides, and also, fears that buried land mines from the Bosnian war could become unearthed and be extremely dangerous, even explode as rescuers work to recover people from that region.

Atika Shubert is monitoring these floods. She joins us live from London this morning.

Atika, what's the latest?

ATIKA SHUBERT, CNN CORRESPNDENT: Well, really, they've seen nothing like this, since they've been keeping records now for 120 years, they haven't seen this much water fall in a short amount of time, in fact, three months of' rain in a few days. That's why you're seeing these incredible pictures of this completely flooded towns in Serbia and Bosnia (INAUDIBLE).

Now, adding to that, we should mention, reports that land mines have actually been shifted because of these landslides in these tremendous. So, rescuers also have to be aware of that danger as well. And now reports that in Serbia, the country's biggest power plant could also be in danger of these floods. It supplies 20 percent of the country's electricity.

So these are things that they're really trying to grapple with, and unfortunately, it looks like there could be another peak high in the river nearby. So, it's something that rescuers are bracing for at the moment.

BERMAN: The worst flooding in 120 years.

Atika Shubert covering that for us -- thanks so much.

ROMANS: All right. Breaking news overnight: a $120 billion business deal falling through for the drug giant Pfizer. We'll explain, next.

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ROMANS: Good morning. Welcome back to EARLY START. It's "Money Time" this morning.

European stocks trading lower this week after five straight weeks of gains. Futures pointing to a lower open on Wall Street if this holds. Why? Ukraine. Tensions there are also driving up the price of oil. Crude prices topping $102 a barrel. The price of Brent crude also rising, up around $110 a barrel. You're going to watch that because the price of Brent can drive the price of gasoline.

The International Energy Agency already calling on OPEC to increase production in the second half of the year to compensate.

Also watching a huge deal this morning, and it's not this AT&T deal to buy DirecTV. Another big deal. AstraZeneca rejecting another offer from Pfizer. This is the fourth time AstraZeneca has rejected an offer from Pfizer, the stock dropping nearly 14 percent on the most recent no.

This time, Pfizer offered nearly $120 billion for the British rival. That's a 45 percent premium. And it was Pfizer's final offer. The company says it will not make a hostile bid. So, watch the drug's space today.

More shocking revelations about how safety issues were handled at G.M. pre-bankruptcy. The National Highway and Safety Administration made public internal G.M. communications from 2008. The carmaker told employees to avoid certain non-descriptive phrases and words in internal e-mails. G.M. instructing its employees not to use words like death trap, rolling sarcophagus and lawsuit waiting to happen all on this list, but so did safety -- safety-related and defect were supposed to be avoided.

The company responded by saying, quote, "Today's G.M. encourages employees to discuss safety issues."

BERMAN: Rolling sarcophagus not a good selling point.

ROMANS: No. Clearly, there's an effort from today's G.M. versus the old G.M. That's something that we've heard again and again. These are internal presentations for employees about what words not to use. BERMAN: From the financial struggles of G.M. to the legal struggles that aren't ending anytime soon.

ROMANS: Totally.

BERMAN: All right. EARLY START continues right now.

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