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Quest Means Business
Reports: AT&T Nearing Deal to Buy Time Warner; Cyberattack Shuts Down Several Major Websites; EU-Canada Trade Deal Falls Apart; Walloon MP: We Don't Want Companies Suing States; Duterte Backtracks: "Cannot" Sever Ties with U.S.; NY Governor Signs Controversial Airbnb Bill; Luxembourg Wants to be "Bridge to EU" for U.K. Banks; Third Wave of Cyberattack Linked to Outage; Trump and Clinton Spar at Charity Dinner. Aired 4-5p ET
Aired October 21, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: The closing bell is ringing on Wall Street. The Dow is down just 12 points. But it a raise most of lot of
loses of the session was much heavily much further down. And we're going to have a gavel to end trading. All right, stop now, you can stop pushing
the button. It was a long bell and a wimpy gavel, but trading is over. It's Friday. It's October the 21st.
Tonight, ma bell is on the prowl, and the reports say AT&T may be looking to buy Time Warner. Don't blame Canada, Europe's trade deal, the giant
deal is being walloped by the Walloons. And the internet goes out across America's East Coast. And we're tired of turning it off and on, and off
and on and off. I'm Richard Quest. It may be a Friday, but I still mean business.
Good evening, tonight a new media giant could be in our midst, quite literally and figuratively. AT&T, that giant of telecom that goes back
decades in the United States, whose very catchphrase used to be, "reach out and touch someone" might be reaching out for new friends.
(BEGIN VIDEO CLIP)
AT&T COMMERCIAL, 1970: Don't let those new friends get away. A telephone call now and then will bring them closer. They're wanting to hear from
you. So, reach out and touch someone. Give them a call.
(END VIDEO CLIP)
QUEST: A commercial from the 1970s, which goes to show the age, extent, and depth of AT&T. But the report is that AT&T is now in advanced talks to
acquire Time Warner. And let's be blunt about this. Time Warner is the parent company of Turner Broadcasting. Turner Broadcasting owns CNN. The
takeover would completely alter the media world as well as giving me a new boss. Adding a huge amount of content for AT&T over its vast distribution
outlet.
So, let us parse exactly who these two companies are. Well, Time Warner has the three big divisions. Warner Brothers Pictures, HBO, and Turner
Broadcasting. Which has CNN, Turner Sports Cartoon Network, TBS and TNT. Time Warner is a pure content company having divested itself of Time Warner
Cable, the magazines, the books and the records.
On the other side of this equation, you've got AT&T. Now it used to be a telco, an old-fashioned telco. Now it's a model that still got landline,
it's got broadband, it's got wireless. It's got U-verse and it's got DirecTV, which is satellite television.
However, what it doesn't have is much content. And that is where you probably see the synergy and the genius, if such it be, AT&T and Time
Warner. Is this going to happen? And bearing in mind we've made the calls up to the 19th floor in this very building and got absolutely no reaction
from anybody. So, we can't tell you yes or no.
But let's have a look at the Time Warner share price, which today closed 7 percent higher on Wall Street. The rumor is it could be a deal done by the
end of the weekend. This is where it's been most of the time. Around the 70s. It hits a peak of 75 and now it's way up over 85. As for AT&T, it's
not your average phone company. It has gone through all kinds of transformations, and AT&T having been broken up in the 1980s, reformatted
in the 1990s. Completely turned itself around in the 2000s, has somehow managed to remain part of the fabric of America.
(BEGIN VIDEO CLIP)
AT&T COMMERCIAL: Over the years we have seen the results of a successful formula. Planned research to anticipate the demands of a growing nation.
Available resources plus the continued efforts of many people. This combination has given America steady improvements in telephone service.
And the story of long distance dialing points the way to even better telephone service for you tomorrow.
(END VIDEO CLIP)
[16:05:00] QUEST: Brian Stelter, out senior media correspondent, and Paul La Monica our guru is here to put this into perspective. It is never easy
talking about your own company, is it?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: They make it easier when they don't return our calls. And today as you said, Richard, we are in the
dark. I think that is because the advisors and the executives are trying to get this deal done by Monday morning.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: AT&T, for what it's worth, did get back to me with a no comment. So at least it was something. Dallas
more friendly to us than --
STELTER: But this is no surprise.
QUEST: We asked the 19th floor. We asked if Jeff Buckus, would come on the program. And we got a very nice "we'll let you know.
STELTER: But what we do know is this is no surprise. Time Warner has been quietly on the market, on the block for a little while now. We think about
two years ago. Rupert Murdoch's bid, $85 a share for Time Warner. A failed bid. Time Warner rejected it at the time. I remember a very senior
source at the time saying, Brian, this was the wrong bidder at the wrong time. Wait two or three years. Well, it's now been two years and it's
time for Time Warner to sell.
LA MONICA: Think culturally. I mean, we all know the fundamental differences between the CNN network and the Fox network. And I think there
are a lot of people wondering how those two can mesh. When you look at AT&T, you don't have that baggage. You talk about the content you had up
there before, DirecTV has the NFL Sunday ticket. Even though there's a lot of concerns about declining ratings for the NFL this year, that's still a
big driver of subscribers for AT&T. You throw in Turner and bleacher report and some of the sport assets that we have, you know CNN Turner, it
does make some sense for AT&T to be interested.
QUEST: The core question is, why do we need them? Jeff Buckus turned this company into a pure content company. What is the advantage to a Time
Warner other than premium on the stock price?
STELTER: What we see are several major players taking over content and distribution together in the U.S. Comcast is one of them. Verizon is one
of them. You can argue Google is one of them, Facebook, and AT&T. AT&T believes it needs to own not just the distribution, but the content.
QUEST: But from Time Warner's point of view. Why does Time Warner want to do such a deal? I can certainly see the advantage from AT&T's perspective.
LA MONICA: When the price is right it's hard to say, no. And I think that people look at Time Warner, and you know this obviously, more than me. The
reason why Time Warner is always in play because it's the major media company that isn't family run. You don't have some dynasty.
STELTER: And it's got a little bit of everything. It's got HBO. It's got the Warner Bros. movie studio. And it's got CNN and TNT and TBS. It
brings a valuable number of assets. But let's think about strategically. Time Warner is looking smaller and smaller in a world where Google,
Facebook, and Comcast and Verizon are looking bigger and bigger. So, that's why even a couple of years ago there was his view toward selling
down the line. Once they shed the magazines and they shed other assets. This is a pure play video company. And it makes a lot of sense if you're
AT&T to have access to that.
QUEST: So we've got Verizon. It's got a variety. It's got AOL. It's got Huff Post. It may or may not have Yahoo before we're finished. So, that
would be very much a third also. Because Comcast, NBC Universal has got the television network and the studios, and of course NBC Universal putting
more money into BuzzFeed in a variety of other things. So, that's moving forward. But this would catapult AT&T into a bigger league.
STELTER: Yes, I view it as on the same level of that has Verizon and Comcast in Google in terms of the future media. We should mention the
serious regulatory concerns. If there is a deal announced on Saturday or Sunday, it is going to be reviewed by the government for many months.
Whoever the next administration.
LA MONICA: I spoke to a fund manager at Mario DeBellis' firm that owns both AT&T and Time Warner. He thinks the deal is going to happen, but he
pointed that out. He said it will be a year minimum before a deal is approved.
STELTER: And the government applied onerous conditions to Comcast's recent deals. So, you would expect conditions on this deal as well. AT&T has
tremendous market power already. We have very intimate relationships with AT&T and Verizon and T-Mobile in this country because of our phones. It is
probably the intimate connection you have as a customer with a company. So, I would argue that makes us very interesting, a lot of opportunities,
but also a lot of challenges.
QUEST: You will -- we'll all remember around this table, I covered it. We all covered it. The debacle of AOL and Time Warner in the 1990s -- the
turn-of-the-century. We were told and this that was the creation of a new synergy for a new era. Well, all it did was destroyed shareholder value.
So, Paul, is this deal different because times are different?
LA MONICA: I think times are different. I think people have legitimately learned from the mistakes that were made in the early part of the 2000s.
When, let's be honest, most of these media companies and tech companies we're talking about, it was so different than now. No one thought that the
good times would ever end. I think people now have a little bit more of a sane view of what the future will be like. And that is a big difference
between now and 2000.
[16:10:07] QUEST: I always remember a boss telling me that covering stories on your own network or about your own network is a career limiting
event. So, let me take the career man, you first, Paul. If the lifeboat going down you're in there with me.
LA MONICA: This is me begging for my job from Randall Stephenson you say?
QUEST: Just may be before we finish. Is it your gut feeling these rumors are true?
LA MONICA: Something I think has to give at this point. When the Fox rumors were around, I understood why there was a reluctance to sell, as
Brian pointed out. Not the right company. Not the right time. But Time Warner, time is running out so to speak, I think on its days as in
independent companies.
STELTER: If it's not AT&T it will be Google or it will be another bidder. No matter what, Time Warner is being sold. The question is to who? And if
it's not to AT&T this weekend, there will be someone else. You have to wonder, if the rumors today are causing the phone lines to light up with
other potential bidders tonight.
QUEST: Gentlemen.
LA MONICA: Thank you, sir.
QUEST: Wonderful to see you, thank you. We will have a new boss by this time next year. I'll be the telephone switchboard operator if it's AT&T.
U.S. markets fell 100 points at the open before staging a light recovery. The market was down very sharply and then it sort of pulled back. If you
really want to know the reason why, there isn't one. It was -- Paul La Monica I think agrees with me today. It was just one of those days where
it starts down and pulls back by the close.
The U.S. government is investigating a massive international cyber-attack that took down some of the biggest websites on the internet. The sites
were out for several hours this morning in the eastern part of the United States. By the afternoon, it had spread to Europe. And among the websites
were Twitter, Amazon, Netflix and Reddit. Samuel Burke Is in London for us. Who was behind it?
SAMUEL BURKE, CNN MONEY TECHNOLOGY CORRESPONDENT: Richard, nobody is pointing fingers quite yet. But this is a serious situation. They went
after the middlemen. Companies like Dyn and possible also Amazon web services. Think of them like the telephone operator. You call up and they
connect you to somebody else. It wasn't, actually, Twitter and Netflix that were hacked, it was actually an attack carried out against these
middlemen. It's called the DDoS attack. Basically, they just overwhelm their servers with traffic and that's brought them down. I think what this
highlights, Richard, is how vulnerable so many businesses can be to what is a relatively simple hacking attack. It makes you think you need, just like
we have at our house, a spare key that these companies need a backup plan.
QUEST: So, if you like, the pipe, the route by which you get to these companies was hacked and therefore the companies themselves. But this is
really, once again just emphasizing the fragility of the infrastructure. They like to portray it as robust, but the truth is, anything but.
BURKE: First they build it and then they think about the security plans later. The proof is in the pudding. Think about Sony. Here is a company
that was attacked by North Korea, according to the United States government. They didn't even have a way of contacting each other. In
fact, Brian Stelter, who was just done with you. Was reporting at the time that the company had to figure out how they would do chain text messages.
All calling each other and texting each other that way. So much infrastructure has been built digitally, but nobody's thought what happens
if it all goes down.
Now you could say thankfully this is just Twitter and Reddit. Our economies don't depend on them. But imagine if this was your banking
website or a major financial institution couldn't do business for a few hours, then may be a few days. And then you start to get into a very
serious situation where stock prices could be affected, the way that Sony's was. So, I think that this situation right now has the potential to be
serious. But it's giving us a window into some of what could happen in a much more serious situation.
QUEST: If you're right, Samuel, and I don't doubt that you are here, then is there an inevitability about these? I mean let's face it, we've now got
to the situation that when we are told that our private data from a department store, a garage that we visited, or a gas station a gas station
--
BURKE: Like Yahoo.
QUEST: Or Yahoo, has been compromised. Most of us shrug our shoulders and wait for any consequences, is it inevitable?
BURKE: Hopefully, these types of situations are a wakeup call to the CEOs of these companies and to the government as well to start thinking about a
backup plan. After Sony, you and I both know very well that lots of major corporations started taking different measures, including our own. And so,
I think every time this happens I hope and I pray that companies look at this and think about building better walls and having better backup plans.
QUEST: Samuel Burke, thank you for staying late on a Friday night in London. Go home and enjoy your evening. Samuel joining us from the U.K.
[16:15:00] Walloped by the Walloons. And a trade deal between Europe and Canada is now described as impossible.
(COMMERCIAL BREAK)
QUEST: It took seven years of negotiations. It's the largest trade deal that the EU has negotiated so far, and it is with Canada and tonight it is
on the brink of collapse. All under the weight of Belgium. One regional government in Belgium, Wallonia, has refused to sign off on this trade
deal. Canada's Minister of International Trade, Chrystia Freeland, is now walking away from the negotiating table. She's on her way back to Canada.
Having been in Belgium trying to ease concerns of the Walloon politicians, she finally gave up. Visibly shaken by the developments, the minister said
she'd come to the conclusion that a deal is now impossible.
(BEGIN VIDEO CLIP)
CHRYSTIA FREELAND, CANADIAN MINISTER OF INTERNATIONAL TRADE: Canada has worked, and I personally have worked very hard, but it is now evident to
me, evident to Canada, that the European Union is incapable of reaching an agreement -- even with a country with European values such as Canada, even
with a country as nice and as patient as Canada. Canada is disappointed and I personally am disappointed, but I think it's impossible.
(END VIDEO CLIP)
QUEST: It's not every day you see a minister being quite so emotional or choked up by the whole event. It's not yet clear if the talks will resume
and the stalemate is casting serious doubts on the bigger issue of Europe's ability to be a reliable trade partner.
Join me at the super screen, and you will see what I mean about how it has been such a torturous event. Remember throughout this discussion, it's
taken seven years to negotiate this trade deal. It's considered to be a template of the sort of deals that the EU would want in the future.
The EU and Canada do about $70 billion a year in trade. This deal set up would eliminate 98 percent of tariffs between the two. So, it is a giant
deal, and the template, perhaps, for the future. However, under the rules, all 28 EU member states must approve, and of course it seems difficult to
get them to agree on anything.
[16:20:00] Because in some countries, such as Belgium, it's not just the central government that has to approve. If you take Belgium, it is also
the regional parliaments that have the power of veto. And in Wallonia, which is part of Belgium, as you can see. You've got the two sides of --
and you've got the Wallonia side. Around three million people live in Wallonia. It's known for its farming industry, and it is concerned over
the cheap Canadian imports. So, a parliament that represents 1 percent of Europe's total population seems to be able to torpedo an entire deal. In
Wallonia, ordinary people said it was up to someone to say, no.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE (through translator): Today I'm proud to be a Walloon. I am proud of trying to protect the national and the European economies.
Everyone was saying yes. I think someone had to say no. I'm proud a Walloon today.
(END VIDEO CLIP)
QUEST: But again, remember what I just said, you start off with a trade negotiation for the EU, and Donald Tusk has already said if this fails that
it's unlikely that the EU would ever be able to do a full-scale trade negotiation. You start off with a big trade deal. You end up with the
European Union. You go to an individual country where regional Parliaments have the veto, and you end up with this situation. I spoke to Olga Zrihen,
a Walloon Parliament Deputy from the Socialist Party and she told me the problem opens the door for corporations to sue governments in international
courts.
(BEGIN VIDEOTAPE)
OLGA ZRIHEN, WALLOON PARLIAMENT DEPUTY, SOCIALIST PARTY: We are not having this kind of practice that we have companies, multinational companies suing
states. We are legal states. We have our own court system and we don't want to be asked for control or claiming by multinationals if the decisions
which have been taken, have been taken by a government or state.
QUEST: Even the Prime Minister of your own country, along with the other 27 members of the union have approve all of this, or at least are going
along with it. So why is Wallonia the big hold out?
ZRIHEN: Looking at what can happen if we consider the size either of the farms we have in Europe, if we consider the size of our business plans in
Europe. If we consider all this together, we think it is not a good way of dealing with things. We are --
QUEST: But there are those who suggest that yes, there are problems with the tribunal, but what this is really about is Wallonia farmers or Walloon
farmers' protectionism more afraid of competition for more efficient and economically viable farms and agricultural products from Canada.
ZRIHEN: Well, not afraid of competition as long as the rules are the same. But if the rules -- the standards are different, and if the competition of
other countries is made between farms, which are three, four, and five times bigger than ours, if the way meat is produced is totally different
from our standards of environmental and social and also our agricultural standards, of course it's no longer a competition.
QUEST: The European Unions in a situation where a parliament representing less than 1 percent of the total population of the Union is able to destroy
this treaty.
ZRIHEN: I think the word destroy is much too strong. We're not destroying anything. We are just analyzing it with another point of view. And I
would like to make remember -- to make you remember and notice that for example, Malta is with 500,000 people and Luxembourg more or less the same
and they have 60 deputies in each parliament whereas we are 3.5 million inhabitants with a parliament with 75 people. So, we are legally on the
same level as any other parliament.
QUEST: Are you feeling the pressure? I mean, I can imagine at all levels of government the phones must be ringing, the texts must be being received,
are you feeling pressure from above?
ZRIHEN: We are feeling pressure, but we don't have the feeling that we are alone.
[16:25:00] Because if you take it into consideration, Germany has asked to its constitutional court, if you take into account what other countries
have asked to have special protocols added, you can see that we are not so all alone as some people want to make us.
(END VIDEOTAPE)
QUEST: The problems of the deal with Canada. We will watch it closely in the week ahead and see if it does actually all fall apart. European
markets, changed on Friday. The DAX was the only major market to inch its way higher. One out of four. But the moves were relatively small, even in
the Zurich SMI, which was off nearly half of one percent. The markets in London and Paris fell by the same amount.
The president of the Philippines is apparently backtracking on his bold and stunning statement that he wants separation from the United States. We
talked about it on this program. And you heard it from the U.S. State Department. Now Rodriguez Duterte made the comment during his trip to
China saying, he wanted to align with the communist nation. Today he said he could not sever all ties with the U.S. just in some areas like foreign
policy.
(BEGIN VIDEO CLIP)
RODRIGO DUTERTE, PHILIPPINE PRESIDENT: It is a good military alliance. It could be an economic alliance. It could be an economic block. Separation
of my foreign policy, that it need not dovetail the foreign policy of America. That is what I meant.
(END VIDEO CLIP)
QUEST: Of course, ordinary Filipinos are somewhat alarmed since ordinary people have such an affection from the Philippines for the United States.
As CNN's Will Ripley reports from the Philippine capital, Manila.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN CORRESPONDENT (voice-over): A slice of Americana in the middle of Manila. Serving up burgers, fries, and friendship between the
U.S. and the Philippines.
DUTERTE: I announce my separation from the United States.
RIPLEY: A 70-year bond, the new Philippines president Rodrigo Duterte seems ready to break in exchange for billions in trade, tourism and low
interest lows from China. Vicente Sia says his new president's anti- American rhetoric doesn't sit well with him.
VICENTE SIA, BUSINESS MANAGER: I am very disappointed that he wants to cut the ties with the America and pairing to the relationship with China.
RIPLEY: He doesn't understand why Duterte is so willing to overlook China's aggressive claim to most of the South China Sea. A recent poll
found most Filipinos have little trust in China and much trust in the United States.
So, by pivoting towards China and away from the U.S., the Philippines populous president seems to be out of sync with many of the people who got
him elected.
Near one of the Philippines largest Roman Catholic churches, a marketplace full of Duterte's key demographics. Working-class Filipinos usually more
than happy to speak on camera about their president.
RIPLEY (on camera): Ask you about Duterte, President Duterte.
RIPLEY (voice-over): The silence, a sign of the divisive tone of Duterte's presidency. Locals say anyone who openly criticizes Duterte, is swiftly
and sometimes viciously attacked.
RIPLEY (on camera): What do you think when he said he wants to separate from America?
MARISA LAGUITAN, STREET VENDOR: I don't think so. It's better to be friends than enemies.
RIPLEY (voice-over): A street vendor, Marisa Laguitan, worries that the president's word could hurt her country, poverty, crime, and lack of
infrastructure continue to plague this nation of 110 million. Ian Dulay says, he's proud of his president for taking a stand against the U.S. Even
when Duterte used vulgar language to describe President Obama.
RIPLEY (on camera): What do you think when he uses language like son of a whore when talking about the American president?
IAN DULAY, CALL CENTER EMPLOYEE: Well, I have nothing against that. It doesn't matter what you say, it's how you say it. But he is just being
real.
RIPLEY: Do you worry he can provoke other countries by being so real?
DULAY: It doesn't really matter. It's about standing up for your people.
RIPLEY (voice-over): The same people who stand to win or lose from Duterte's risky power-play between the world's superpowers. Will Ripley,
CNN, Manila.
(END VIDEOTAPE)
QUEST: As we continue our evening discussion on business and economics, I'm delighted that you're with us. Travelers love Airbnb. That much is
quite clear. New York State among with many other places feels otherwise. And a new law which came into force today could severely restrict Airbnb's
operations in the most popular city.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I am Richard Quest on a very busy day. There's more of QUEST MEANS BUSINESS in just a moment. When you're going to hear from
Luxembourg's economy minister. He's telling me how his country is not fishing for business from companies as a result of Brexit.
And Donald Trump's comedy routine, well, it didn't go down well last night. I'm going to ask a public speaking coach how he might have done better.
Before we get to those stories, you are watching CNN. And on this network the news, it always comes first.
To Mosul and the Iraqi and Kurdish forces continue the battle against ISIS for control of the Iraqi city. And the U.N.'s worried that the terrorist
group is using civilians from nearby villages as human shields. The U.N. Human Rights Office told CNN, it's extremely concerned.
(BEGIN VIDEO CLIP)
RAVINA SHAMDASANI, SPOKESWOMAN, U.N. HUMAN RIGHTS OFFICE: We know of these 550 families that were forced to march toward Mosul. And in fact, we don't
even have the information of how many of them did make it to Mosul. We understand that there were some 40 individuals who were executed by ISIL
for their perceived disloyalty. We're also particularly concerned about the conditions minorities including Yazidi's in these areas. Because from
what we know of the way that ISIL has administered Mosul in the past years, these minorities are particularly at risk.
(END VIDEO CLIP)
QUEST: The Philippine president is walking his controversial comments about ending an alliance with the United States. President Rodrigo
Duterte, says it is in the best interest of his country to maintain the relationship. Clarified what he meant by a separation of foreign-policy
instead of an outright severance of ties.
Donald Trump and Hillary Clinton are making a full-on blitz of battleground states of the 18 days before the election. New polls show that Trump still
faces an uphill battle. Even some traditionally Republican states are now battlegrounds. Some say he doesn't want any regrets, so he's keeping a
packed schedule.
(BEGIN VIDEO CLIP) DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I don't know what kind of shape I'm in, but I will be happy and at least I will have known
win, lose, or draw, and I'm almost sure if the people come out, were going to win. But I will be -- I will be happy with myself, because I always
say, I don't want to think back if only I did one more rally --
(END VIDEO CLIP)
QUEST: Dozens of people being treated for breathing problems after what authorities are calling a chemical incident at London City Airport. The
fire brigade says the airport is now safe. It was evacuated and closed for a couple of hours. The cause is still being investigated.
The trade agreement between the European Union and Canada is tonight on the verge of collapse.
[16:35:02] It's because one regional government in Belgium. Agent negotiators left last-minute talks on Friday without resolving the
objections from Wallonia. EU leaders have voiced unanimous support for the pact, which has been under negotiation for seven years.
QUEST: The governor of New York signed a major controversial bill concerning Airbnb into law. It's called the short term rental company,
says the new rules will severely damage the way they do business in the United States. And a lot of ramifications for its operations worldwide.
Clare Sebastian is here. There have been many attacks on Airbnb, so what does this -- take us through it very slowly, because it is complicated
stuff. What does this new law do?
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, it is complicated and could be confusing, let's go step by step. What it does is it imposes fines for
advertising not for all departments, but for single whole homes in buildings with more than three dwellings for less than 30 days.
QUEST: So, you can no longer advertise a whole apartment or home if the building has three or more apartments and you're renting it for less than
30 days.
SEBASTIAN: That was already illegal to rent, and now it is illegal to advertise them. That law takes effect immediately. And of course, this
cuts to the core, Richard, of Airbnb's business, this is marketplace where if you want to rent out your home for a short-term rental and this is where
you go to advertise it.
So, this why Airbnb is so angry. I want to read you a statement we have this afternoon. They say in typical fashion Albany back room dealing
rewarded a special interest. The price gouging the hotel industry and ignored the voices of tens of thousands of New Yorkers. A majority of New
Yorkers have embraced home sharing and we will continue to fight for a smart policy solution that works for the people, not the powerful.
Crucially they say we're filing a lawsuit in New York this afternoon. They are very serious about this and they say they're going to fight it. On the
other side, the lawmakers that brought the bill say Airbnb in New York is dramatically reducing the stock of affordable housing.
QUEST: If I was to go online now to Airbnb and try to find a place in New York first of all, as I am the renter, I would not necessarily know if
whether there were three or more apartments in the building unless I saw a picture of a very large building.
SEBASTIAN: Yes, you can guess from the pictures or the view, you only have to look at the skyline, Richard, to know there are very many buildings in
New York with more than three homes.
QUEST: What is the punishment?
SEBASTIAN: Starting around $1,000 for first time event and go up to $7500. Put that in context, the median amount that Airbnb hosts in New York earn
in a year is just over $5000. So, this really cuts into that. It could be a serious deterrent and that's why you see Airbnb are so angry.
QUEST: You've already had the rule against, and in the building for example where I live in New York, it bans Airbnb. Not just Airbnb it bans
short term lets under 30 days. And the law already says this in many cases. But this would rely on somebody enforcing the advertising ban into
are -- is New York going to go on line every night, and say that is one, there is another one, there is another one.
SEBASTIAN: This is the big question. It's all very well bringing in this law, now they have to police it and you know we don't have any concrete
data, but we've seen crack downs on Airbnb across Europe from Berlin to Barcelona. And still the popularity of the site is surging. So, I think
this is a crucial existential question for the regulators as Airbnb continues to grow. How you regulate it and how you police that regulation
going forward.
QUEST: Clare, thank you, report on this next week. We will be interested to hear from Airbnb renters -- people with the apartments, hosts, thank
you. I have used Airbnb before somebody suggested that I haven't, I have. Very successful it was, too.
As we continue tonight, gone fishing for the biggest catch of all. A U.K. bank, banks could leave the U.K. if they lose their so-called pass-porting
rights. Hearing from the economy minister in Luxembourg, who denies the fishing expedition, but he is certainly trying to reel in a bank.
[16:40:00] (COMMERCIAL BREAK)
QUEST: Earlier we were talking about little Wallonia in Belgium and how that is having a major impact on a treaty. Every country large and small
is working out the implications of Brexit. And even if we take little Luxembourg, the economy minister says if Brexit means U.K. banks loose
pass-porting rights, well then welcome in. Come to Luxembourg.
Pass-porting allows the banks to do business anywhere across the Union. Many European countries are rolling out the red carpet. Think about
Frankfurt, think about Paris, think about Amsterdam, I asked Etienne Schneider if a planned trip to the U.K. was more than just a fishing
expedition to reel in a bank?
(BEGIN VIDEOTAPE)
ETIENNE SCHNEIDER, LUXEMBOURG ECONOMY MINISTER: I was not happy about the Brexit decision, but we have to accept it. Secondly we're not going to
Great Britain to do fishing and to convince companies to settle down in Luxembourg. We want to offer them Luxembourg as their European hub, and to
be a partner and to be the bridge from the United Kingdom to the European Union. Especially in financial services but also in other businesses.
QUEST: But if you accept the Paris, Frankfurt, Amsterdam, will all be fighting over the spoils, assuming pass-porting fails and a hard Brexit is
the way forward, you want to be in that?
SCHNEIDER: Absolutely, I think we have good arguments to be partners of British companies or banks or financial institutions which are settled down
in London. Not all of them will use Luxembourg as their bridge to the European Union. They will look at different kinds of business they do.
So, for instance, if you look at the fund industry, the Luxembourg industry that is the most successful, in Europe and the second biggest in the world,
of course maybe they will try to find funds in other places.
QUEST: Doesn't this create a conflict in a way? As the Brexit negotiations get underway, you have no interest in London maintaining their
pass-porting rights?
SCHNEIDER: No, that's right, many leaders of the European Union say that. It will not be possible that there will be cherry picking. That --
QUEST: No, I'm not talking about whether or not it is possible or not. I'm saying you have no interest in it happening because if pass-porting
fails, you'll gain.
[16:45:00] SCHNEIDER: Yes, but you should not see it that way. We are interested in a strong partner and a strong United Kingdom even though they
will not a member of the European Union any more. What we want is to be a partner of these companies in the United Kingdom which in the future will
have problems because they don't have direct access to the European Union single market.
We want to be the bridge and the partner for these companies. That is exactly what we want to do. So, we are not like the -- the French who said
they would roll out the red carpet.
QUEST: Oh, you would, you would roll out the red carpet --
SCHNEIDER: If we would do so, we would just do it. The French is more difficult. They're always on strike. It would be more difficult from a
technical point of view.
(END VIDEOTAPE)
QUEST: That is certainly a diplomatic answer from the economy minister which I am sure will go down very well with his French counterparts.
News I must bring you, we have an update on the cyber-attack that I told you about earlier, Samuel Burke is now back with us, you were talking about
what happened with this DDOS, this cyber denial of service? But I believe it is happening again?
SAMUEL BURKE, CNN MONEY CORRESPONDENT: Richard, Dyn, which is company, a kind of middleman facing these attacks confirmed there is a third wave of
attacks under way right now. Each time this becomes more and more serious as we see this.
Again, Dyn is this middleman company. Think of it like a telephone operator, you might have to call the operator to connect to your mom, well,
this is the middleman between you and twitter. And what is happening the DDOS you described -- somebody is just
bombarded by so much traffic from the hacker that it actually causes their system to go down and that's what we're seeing for a third time.
QUEST: The size and scale is pretty of the same ilk. Samuel, thank you very much, indeed. Come back when there is more to report on that. They
will be finding exactly where they want to go. Coming up on QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Here she is tonight. In public, pretending not to hate Catholics.
(END VIDEO CLIP)
QUEST: The lead balloon of public speaking. Jokes turning to insults, laughter becomes boos. Donald Trump and Hillary Clinton. We have advice
how they could have done last night's dinner. First, we need to make, create, innovate.
(COMMERCIAL BREAK)
QUEST: Now it was meant to be a moment of civility that moment in an electoral process where rivals can come together and show they can be
polite. And be fun to each other.
[16:50:00] Two rival U.S. presidential candidates, there is Hillary Clinton over on the end, we've got Cardinal Dolan in the middle and Donald Trump to
the right next to his wife. It was meant to be a break from the ugliness of the campaign trail to benefit Catholic charities. It is the Al Smith
Dinner in New York and it is usually a good-natured roast, but Donald Trump didn't get the memo and he got out the big bazooka at Hillary Clinton and
was booed more than once.
(BEGIN VIDEO CLIP)
TRUMP: Here she is tonight, in public pretending not to hate Catholics. Now if some of you haven't noticed, Hillary isn't laughing as much as the
rest of us. That is because she knows the jokes, and all of the jokes were given to her in advance of the dinner by Donna Brazil. Which is, everyone
knows of course, Hillary's belief that it takes a village. And it only makes sense after all in places like Haiti where she has taken a number of
them.
(END VIDEO CLIP)
QUEST: So a lesson there in public speaking. And how not to do it. You don't have to be running for the White House to know there is an art to the
after dinner speaking. The way you present yourself. Samantha Ettus is a public speaking expert. And author of "The Pie Life -- The Guilt Free
Recipe for Success and Satisfaction".
Joining us now from San Francisco, good to see you, I am at my podium here in New York, now look, what did Donald Trump do wrong last night?
SAMANTHA ETTUS, PUBLIC SPEAKING EXPERT AND AUTHOR: He misread the room. And as you said this was a charity dinner, meant to be a lighthearted
joyful affair after a very tense debate, and it has gone on for years and he is probably the first presidential candidate in history to completely
misread the room.
QUEST: How do you misread an event like that? The particular comment I remember him saying besides the Catholic comment, what he actually said
about Clinton, so corrupt, so corrupt. Surely he has been to that dinner enough times, his writers know the difference between gentle ribbing and
singeing and all-out war and burning.
ETTUS: I don't even think at that point it was about writing, I think his anger, his impulse control has gone by the wayside. And at this point he
needs to worry a lot more losing his customers than losing his base, because he has gone so far off the end of what, you know, he needs to do in
terms of his future business that that is what he needs to be concerned about. At this point he has alienated women to such an extent, and I have
a hard time imagining most women wanting to go to the Trump hotel or having them or their husbands be on the golf course. He has to worry about losing
his customers at this point.
QUEST: Now as we are talking about public speaking and the way one has to get it right, listen to how Hillary Clinton -- this was probably her most
barbed comment last night bearing in mind that Melania was sitting next to Donald. Have a listen.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, DEMOCRATIC PRESIDENTIAL CANDIDATE: People look at the statue of liberty and they see a proud symbol of our history. A nation of
immigrants, a beacon of hope for people around the world. Donald Trump looks at the statue of liberty and sees a four. Maybe a five if she loses
the torch and tablet and changes her hair. You know, come to think of it, you know what would be a good number for a woman? 45.
(END VIDEO CLIP)
QUEST: So, what do you make of that? It was clearly barbed, Melania's cheeks tightened up, but it was the right sort of barb.
ETTUS: you got it. It was in the confines of what is acceptable at this kind of dinner, the kind of humor they accept and are looking for. It is a
Catholic charity and he said she hates Catholics. He went below the belt and it was just something you don't do at a dinner like this.
[16:55:00] It has to make people wonder what he would do if it was an international relation situation. Is he going to misread those rooms as
well where the stakes are a lot higher?
QUEST: So your advice to anyone giving a speech, and wants to be a bit risque but not go over the cliff, what's your advice?
ETTUS: I think if I was his communications director I would whisper in his ear "your crazy is showing." Because I think he has no concept of how far
he has gone. And at this point he has to reign it in for the sake of his future businesses. At this point I don't think it is any longer about the
base of voters, I don't think any of his voters can afford his hotels at this point.
QUEST: Thank you for joining us from Los Angeles giving us the perspective, appreciate it, thank you.
The art of public speaking. We'll have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Getting it wrong in public speaking is an excruciating experience. The room goes quiet. All can hear is a
cricket in the rafters and maybe a bit of booing. Last night watching Donald Trump was like watching a horror movie.
Where you just look through your fingers. I can't watch this. Car crash television. It was almost. But the reality is having been in that
situation of giving a speech where it fell like a lead balloon, what you end up doing is digging the hole even deeper. You just keep going, if I
only make another comment, they'll get even laughter -- eventually there will be a laugh somewhere.
When actually of course what you should do is pack up and go home. Talking of next week, we are in Florida all of next week. QUEST MEANS BUSINESS
comes from sunshine state with our election coverage. That's business for tonight. I'm Richard Quest in New York.
[17:00:00] Whatever you are up to in the hours ahead, I hope it's profitable. I'll see you in Florida on Monday.
END
