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EARLY START

Big Mergers in Telecom; Third MERS Case Confirmed in U.S.; Putin Orders Troops to Pull Back; South Korean Coast Guard Dismantled; Pacers Strike First Against Heat

Aired May 19, 2014 - 05:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: A mega media merger that could change the way you use your laptop, your smartphone, your television. AT&T taking over DirecTV in a nearly $50 billion deal. I'll tell you what that means for you ahead.

JOHN BERMAN, CNN ANCHOR: Deadly viral scare. MERS now spreading in the United States. A third case reported. The very latest on what health officials are doing this morning.

ROMANS: Breaking news overnight. South Korea's president furious over the ferry disaster that killed hundreds of students dismantling the country's coast guard. We are live in Seoul with the latest.

BERMAN: Good morning, everyone. Great to see you today. Welcome to EARLY START. I'm John Berman.

ROMANS: I'm Christine Romans. It's Monday, May 19th. It's 5:00 a.m. in the East.

Up first, if you're watching us on AT&T or DirecTV, listen up --

BERMAN: Even if you're not.

ROMANS: For everyone who watches television.

AT&T is buying DirecTV in a deal worth $50 billion, affecting 25 million television subscribers. It will ultimately make it the second largest provider in the country, behind Comcast. AT&T's CEO Randall Stephenson says this merged company will, quote, "offer new bundles and deliver content to consumers across multiple screens, mobile devices, TVs, laptops, cars and even airlines."

Of course, not everyone is excited. Remember, this deal comes just months after Comcast announced it will buy Time Warner Cable for $45 billion. That deal waiting regulatory approval. But if regulators sign up, it gives Comcast the title of top cable provider with 30 million. Meantime, the parent company of Sprint trying to buy T- Mobile. All of this consolidation has some industry watchers worried.

(BEGIN VIDEO CLIP)

MICHAEL WEINBERG, VICE PRESIDENT, PUBLIC KNOWLEDGE: There could be short-term benefits especially if it means that more subscribers get access to a combination of television and Internet access.

But I think in the long term, even in the medium term, with that consolidation and that reduction of competition, we see fewer things happening and prices mostly going up for consumers and subscribers.

(END VIDEO CLIP)

ROMANS: Of course, prices have been going up with or without mergers for some time. Regulators are aware of that issue. They've yet to approve Comcast purchase of Time Warner Cable. And language in this AT&T deal seems to court regulators, pointing out that a combined company will provide Internet access to areas that don't currently have it. Fifteen million more businesses and households in rural areas, something the Obama administration has made a priority.

It's interesting, because also in this deal, AT&T is promising DirecTV customers, any of you out there with DirecTV, for three years, nothing changes for you. You get your TV the same way. Your pricing is all the same. You could see new bundling opportunities for the next few years but for DirecTV customers nothing changes right away.

BERMAN: If you like your TV service, you can keep it.

ROMANS: Oh, yes, very funny, Berman. Very funny.

BERMAN: All right. A third case of MERS has been confirmed to the United States. A man in Illinois testing positive, becoming the first person that contracted the potentially deadly virus while here on U.S. soil.

Let's get more now from our senior medical correspondent, Elizabeth Cohen.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: This is now the third person in the United States who's been found to have MERS or the Middle East Respiratory Syndrome. Now, this third person, it's a little bit different than the first two and I'll tell you why.

The first two people, they were infected. They got infected in Saudi Arabia, then they got on a plane and came here. This third one, this third one, became infected in the United States. So, this is now the first case of someone becoming infected on U.S. soil.

And here's what happened. This third case, he had a meeting with one of the first two cases, a gentleman in Indiana.

So this new case, a man from Illinois and the man from Indiana had a meeting late in April. For 40 minutes, they sat and they talked. They were within six feet of each other. They shook hands and that was their only physical contact that we know about. Then, the next day, they had another meeting even shorter.

So, just two meetings. One 40 minutes, one even shorter. The only physical contact was a handshake. That apparently is enough to share MERS from one person to another.

This is a little different I think in many people's minds than what was said before. Before, doctors referring to MERS is something that in order to get it, you had to have the close contact. You know, someone who lived in your household, or the kind of contact that a doctor and patient would have repeatedly over time.

This is a little bit different. I think it will definitely raise concerns for some people, can I get MERS just from having a business meeting with someone?

(END VIDEOTAPE)

BERMAN: Our thanks to Elizabeth Cohen for that.

Now, MERS is not always fatal. The Illinois man who tested positive is said to be in good health this morning.

ROMANS: Breaking news, Russian President Vladimir Putin ordering troops near the Ukrainian border to return to their home bases. That is according to the Kremlin. The move is being seen by some as an effort by Moscow to de-escalate the crisis in Ukraine. About 40,000 troops are believed to be gathered along the border right now. Putin issued a similar order earlier this month, but the U.S. and NATO reported seeing no sign of a pullback.

BERMAN: Breaking overnight, the president of South Korea dismantling her nation's coast guard and vowing to reorganize her government over last month's tragic ferry disaster. She said South Korea owes it to the hundreds of students who died and she's apologizing for the coast guard's bungling of the operation, as South Koreans call on her to step down.

Let's bring in Paula Hancocks live this morning.

And to see the president with tears streaming down her face saying there will be changes, does it sit well with the people in the country who are so, so angry and grieving over the loss of those students?

PAULA HANCOCKS, CNN CORRESPONDEN: Well, Christine, this is a side of the president that the South Koreans tonight get to see usually. As you say, she was tearful towards the end of her national broadcast, apologizing and taking responsibility for the pain of the nation. The reason she got emotional she was talking about people who had given up they are lives to save others. She was talking of the passengers and some of whom have given other people their life jackets and then headed back towards the ferry to try to save more people.

(BEGIN VIDEO CLIP)

PRESIDENT PARK GEUN-HYE, SOUTH KOREA (through translator): I believe these people are the real people in our generation. I propose a monument to pay respect to the victims and the importance of safety and to set April 16th as a day for people's safety. I again pray for those who passed away during the incident and express my deep condolence to the families. Thank you. (END VIDEO CLIP)

HANCOCKS: But there is no sympathy for the coast guard. The president slammed the coast guard in its early respondent's reaction. There have been critics across the country asking why the passengers were not able to be rescued in the first couple of hours before the ferry was completely under the water, and also there's been questions as to why the coast guard managed to rescue the crew and the captain himself. Before they managed to rescue some of the passengers, of course, the coast guard saying because the life jackets were on, they simply couldn't tell the difference.

But the president is saying that will be very different now. The coast guard is going to be dismantled. Of course, this is an ongoing search operation. There's still 18 people within that ship of the waters of the Yellow Sea. So the search will not be affected, but the hierarchy certainly will be.

Back to you.

ROMANS: So many questions, why were the students told over the intercom system to stay put while the crew were so quick to get off that ship and seek help. Thank you so much for that, Paula.

BERMAN: Seven minutes after the hour.

There's an ominous new kidnapping threat against schoolchildren in Nigeria this morning. The Boko Haram terrorist organization now targeting an all-boys boarding school. This as Nigerian police were ordered to beef up security at all boarding schools in the area.

Meanwhile, the search for more than 200 girls abducted last month, that search coming up empty so far.

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

Vlad, what's the latest threat?

VLADIMIR DUTHIERS, CNN CORRESPONDENT: John, this latest threat, is again a school in northeaster Nigeria, Borno state, the very state where these girls were abducted a month ago. But this time, it's in a boys school. And in the past, Boko Haram has not abducted boys. In February, they attacked an all boys school that has this combination coed, they killed, massacred these boys, many of them burned alive in their dormitories, others who tried to escape were shot, or hacked to death with machetes, John.

The girls that were at that school were spared. They were told by militants to go home and get married. This is the terror threat that people of northeastern Nigeria are constantly living under. They've been living like this since 2009, and the Nigerian military and Nigerian police unable to stop the constant attacks by Boko Haram. They seem to attack with impunity across that state and to others that are under that state of emergency. But I spoke to a mother yesterday whose daughter is missing. And she told me that if her daughter should ever go home, that she will go back to school. And I think that's the message for people that are watching around the world, that these girls, they don't -- having to go to school when you have been attacking or killed or kidnapped is something that we can't imagine. And yet, they still choose to go to schools.

Very brave there, John.

BERMAN: They're being kidnapped and terrorized, Vlad, for trying to get an education. Blows the mind here in the United States.

Give us the sense of the government reaction to these latest threats against the boys school and an update on the search for the girls who are missing.

DUTHIERS: So the government has said they are beefing up security around the schools. But in the past, families that we've spoken to have said it doesn't really matter. You're talking about usually half a dozen or a dozen military or security guards guarding an institution. Typically, when Boko Haram fighters come into a town, they come 200, 300 strong, rocket-propelled grenade launchers, armored personnel vehicles. They even have anti-aircraft weapons, John.

So, very difficult, even though these soldiers, these police officers are brave to stand in the line of such fire, it's not very easy to push them back. With regard to the search, we know that the Nigerian president has said there are 20,000 Nigerian soldiers looking for the girls in northeastern Nigeria, but he's admitted he doesn't know where they are, John.

BERMAN: A daunting task. Vladimir Duthiers in Abuja this morning, thanks so much.

Happening right now, thousands of California residents returning home after wildfires took over their towns. While firefighters managed to put out the flames, the fire threat for California is only beginning. Our Indra Petersons is live in San Diego to explain.

ROMANS: And Republicans not backing down on recent attacks on Hillary Clinton. Should the country be concerned about the former secretary of state's health? What the GOP's leader is now saying, next.

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone.

Firefighters in San Diego finally getting the upper hand on a rash of fires that left dozens of homes in ashes and forced thousand of people to evacuate. Temperatures will cool 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 large and dangerous fire season ahead.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

BERMAN: Our Indra Petersons is on the fire lines this morning. She joins us live from Escondido, in California.

Indra, you've been there all weekend from above, in the helicopters, below, taking a look at these fires first hand.

INDRA PETERSONS, AMS METEOROLOGIST: You know, and it's so tough, John, this morning. Taking a look -- we're in this community called Harmony Grove. It's a 120-year-old spiritual community that was hardest hit from the Cocos fire. Now, keep in mind, there were about 30 structures here that were evacuated. Only about an hour come Wednesday afternoon, and then they were able to return Saturday afternoon to this.

You're talking 30 structures, 25 of them, completely down to rubble. I'm looking around for any semblance of a home that these residents can return to and you don't really see anything left. This is devastating. And keep in mind, talk to Cal Fire, this is what we're expecting as we continue to go throughout the summer and to the fall.

Take a listen.

(BEGIN VIDEO CLIP)

PETERSONS: Looking forward. I mean, this, again, is so early. What are you expecting or what you need to do to prepare for the season that still lays ahead?

UNIDENTIFIED MALE: We're expecting extreme conditions. We're expecting more fires this year. Early since January 1st, we responded to 1,500 fires. That are normal, it's around 800.

(END VIDEO CLIP)

PETERSONS: I mean, so unbelievable. Let's talk about why this happened. Why we saw fires so early in southern California. There's a big dome of high pressure. Something you don't typically see. If you're not from California, you may not be familiar.

We call it May gray or June gloom because you have the strong marine air that is online shore that brings up humidity. That's not the case. That's not what they saw all weekend long. They had soaring winds that were going into opposite directions, these offshore winds that was very dry.

The good news, we're starting to see a low pressure system just north of us. That's dropping to the south. So that typical weather, we should be seeing this time of year has returned. We're seeing on that, the humidity is great about 80 percent. Temperatures back to what we should be seeing not seeing 90s and triple-digit heat, but rather some 60s and even some 70s. So that's good news.

Unfortunately, that doesn't mean the fire threat is gone for the nation. It's spread farther to the east. So, you're talking to places like New Mexico or Arizona today. That's where we have more of that elevated fire risk. Otherwise, across the country, the bigger story is the cold country making its move from the upper Midwest and spreading through the Northeast by about Wednesday or so, bringing some light rain.

But truly devastating, guys, when you take a look around. Hard to say this was one or two homes or what was here. Remember, of 30 structures here, this is the hardest hit, 25 of these are now gone.

BERMAN: Wow, scope of that damage, just astounding. Indra Petersons for us in Escondido, thanks so much.

PETERSONS: Heartbreaking.

ROMANS: Thanks, Indra.

We're hearing from the whistle-blower who triggered a federal investigation of the V.A. clinic in Ft. Collins, Colorado. There he is, Lisa Lee, a former Navy reservist said she was suspended from service for two weeks for refusing to cook the books to cover up long treatment delays for patients.

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

BERMAN: Republicans keep on talking about Hillary Clinton's health. Karl Rove standing by his comments Sunday using Bill Clinton's own words to back up his case. The former president had said it took his wife six months to get over that bad 2012 concussion. At the time, the secretary of state was out of work for about 30 days.

Sunday, the RNC chair Reince Priebus says the questions about Mrs. Clinton's health are legitimate.

(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 more important issue for me as leader for this party is what's the record for 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: Of course, when they're talking about her age and health, they're not talking about issues. Meanwhile Democrats have been defending Mrs. Clinton and saying she's in the prime of her life and that Republicans are just scared to run against her in 2016. ROMANS: All right. New calls to screen train engineers for sleep apnea after officials revealed that engineer in last year's deadly Metro North derailment suffers from that condition. Victims of sleep apnea are repeatedly awakened when their airways closed during sleep. No cause has been established in that accident that left four dead and dozens hurt. There are no national screening requirements and Metro North says a final decision has not been made.

BERMAN: General Motors investigating its own legal department over the handling of ignition defect now linked to 13 deaths. That's according to a report in "The New York Times." General Motors learned of this defect more than a decade ago. But only issued the first recalls in February of this year.

Last week, the company was hit with a $35 million fine. That's the maximum in a case like this. Regulators say they concealed the problem. More severe punishments could be on the way.

ROMANS: And EARLY START on your money news this morning. Stocks in Europe lower after five weeks of gains, continued tensions in Ukraine, and a failed deal are the problem here today.

AstraZeneca rejected another bid from Pfizer this morning. This time, Pfizer offered $120 billion for its British rival. That's a 45 percent premium. AstraZeneca's stock down as much as 14 percent after this latest no. Pfizer says it will not make a hostile bid.

Dow futures in the U.S. pointing to a lower open right now on Wall Street.

Justin Timberlake may have taken on top honors but Jennifer Lopez and Michael Jackson stole the show at last night's Billboards Awards in Las Vegas. I will explain.

Mr. Timberlake won seven awards more than any other artist after a seven-year hiatus. Look at him there. He's very happy, he's dancing. His album "20/20 Experience" beat out Beyonce and Drake for top album. Mr. Timberlake says he was stunned by the announcement.

Take a look at Jennifer Lopez now blowing away the audience with her performance of "First Love." She was honored with Billboard's Icon Awards. But the big showstopper was this, Michael Jackson, or a hologram of Michael Jackson just rocked the house. The late King of Pop or the hologram of the late King of Pop performing "Slaved for the Rhythm". The five-piece band and 16 live dancers, that hologram took half a year to plan, choreograph and develop.

ROMANS: All right. Coming up, four teams left standing in the race for the NBA title, and the Miami Heat may have their hands full if they plan to repeat.

Brian McFayden has the details in the "Bleacher Report", next.

(COMMERCIAL BREAK)

BERMAN: Home court advantage means a lot during the NBA playoffs. The Indiana Pacers use that and some large men down low, to strike first in the Eastern Conference Final.

ROMANS: Brian McFayden has more on the "Bleacher Report".

Good morning.

BRIAN MCFAYDEN, CNN CORRESPONDENT: Good morning to you guys.

The two-time defending champs Miami Heat were in Indy to face the Pacers. Indiana hadn't won a series opener yet in this year's playoffs. But they led wire to wire in this one. Pacers finally get the monkey off their back by winning game. They scored their highest point total of the post-season. Pacers win 107-96. Game two is Tuesday night.

And tonight on TNT, game one of the Western Conference Finals, Spurs hosts the Thunder at 9:00 p.m. Eastern.

California Chrome won the Preakness Stakes this weekend setting him up to win the Triple Crown. If he wins the Belmont Stakes on June 7th, he's the odds on favorite. But he may not get a chance to race. He wears nasal strips to keep his airway from becoming smaller. But that's a no-no in the Belmont Stakes. California Chrome's owner will have to make a formal request for the nasal strips. They can also decide to run without the strips if they don't receive the waiver to wear them.

Trending on bleacherreport.com, we're calling this young man our player of the weekend. Check him out as he gives the souvenir ball to the pretty girl behind him. Wait, he pulls the switcheroo. He actually keeps the game ball and gives her the other ball in his hand.

That kid's got some game. Good stuff there.

BERMAN: Wow.

MCFAYDEN: Nice move, man.

BERMAN: What do you think about that?

ROMANS: I like it.

That kid is going to work on Wall Street. That's all I got to say.

MCFAYDEN: Were you writing that down, John?

BERMAN: I'm like, what did he do? Kept ball.

All right. Thanks so much, Brian.

ROMANS: Thanks, Brian.

BERMAN: Next up, the nearly $50 billion media merger that could drastically change the way you surf the web, watch TV. It will change life as you know it.

ROMANS: Or not. BERMAN: Or not, right after the break.

(COMMERCIAL BREAK)