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Early Start with John Berman and Zoraida Sambolin

Tearful South Korean President Apologizes; New Boko Haram Kidnap Threats; San Diego Fires under Control; Historic Flooding in the Balkans

Aired May 19, 2014 - 05:30   ET

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

(COMMERCIAL BREAK)

JOHN BERMAN, CNN ANCHOR: A huge media merger that could have a huge impact on how you use the Internet, your television, just about everything. AT&T paying nearly $50 billion to buy DirecTV, 30 million U.S. customers set to feel the effects of this deal. We're breaking down what it means to you.

CHRISTINE ROMANS, CNN ANCHOR: A rare deadly virus spreading in the United States for the first time, a third case of MERS diagnosed and this patient didn't contract the disease from an exotic overseas trip, but from a Midwest business meeting. The very latest, ahead.

JOHN BERMAN, CNN ANCHOR: Happening now a new threat from the terror group responsible for kidnapping hundreds of school girls in Nigeria. We are live with who they're targeting now.

Welcome back to EARLY START, everyone. Great to see you this Monday. I'm John Berman.

ROMANS: And I'm Christine Romans. It's 30 minutes past the hour. Our top story this morning, AT&T is buying DirecTV. A merger that will affect 30 million customers. The price tag nearly $50 billion. It will ultimately make it the second largest provider in the country behind Comcast.

Comcast announced it would buy Time Warner Cable for $45 billion 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.

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

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ROMANS: The AT&T CEO Randall Stephenson said a merged company will improve customer choice, saying the deal will, quote, "offer new bundles and deliver content to consumers across multiple screens, mobile devices, TVs, laptops, cars even airplanes."

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

And for DirecTV customers, they might be saying this morning, wait a minute, I don't want anything to change for three years, AT&T is promising nothing changes. Same pricing, same everything for those customers. But ultimately, what AT&T could do is put a lot of these thing, voice, data, TV, even home security, all in one company and offer new kinds of bundles so AT&T gets more revenue per customer which is really important in the industry. But then maybe customers get some more choice.

In terms of cable bills or bills for watching television, no one says they're going to go down. They have been going up. We've been using more and we expect more, right? And we pay for it.

BERMAN: It never seems to go down.

ROMANS: No.

BERMAN: We have some unsettling medical news to tell you about right now. 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 deadly potential virus had been contracted overseas. Officials say the latest victim came into close contact with a man who was diagnosed after returning from Saudi Arabia. A blood test confirmed the infection. The man luckily suffered only mild symptoms. This disease can be fatal in up to one- third of cases.

ROMANS: Breaking news, Russian President Vladimir Putin ordering his troops near the Ukraine 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 Russian troops are believed to be gathered along the Ukraine border right now. Putin issued a similar order earlier this month but the U.S. NATO report are seeing no sign of a pullback.

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

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

Really an extraordinary apology and reorganization all at once here.

PAULA HANCOCKS, CNN CORRESPONDENT: Well, that's right, John. This is a side that we saw this Monday that most South Koreans simply don't see from their president. We saw a tearful apology towards the end of her speech when she was talking about the people that she called the heroes of our generation. Those people, passengers and crew members, who lost their lives to save other people's lives. But she was (INAUDIBLE) at the beginning of the speech. She said that she was dismantling the coast guard in this country. She said that there was just too much criticism of them. And simply, they did not do enough. The first responders did not save enough people.

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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 structure. Since it was created, its concentrate on investigation and external growth and has neglected search and rescue tasks.

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HANCOCKS: Now there have been questions as to why more passengers were not able to be saved. Almost 300 people having been killed in this disaster, 18 people are still missing. This search operation is still ongoing. And the day-to-day operation will not be affected, according to officials but the hierarchy and the structure will change. The search operation will now be overseen by a new government agency. A new safety agency. And the investigation itself will be looked after by the police.

But the coast guard has come under a huge amount of criticism as to why more people were not able to be rescued. Why the crew and the captain were rescued first before the passengers. And also, there was an 18-year-old boy who was on board that ship, he is the first person to make that distress call.

And it was discovered that they had bungled the distress call as well. That they had asked this poor boy what the longitude and latitude of his -- of his ship was. The sort of questions that he was unable to answer. So really from start to finish, the response has been poor. The president of South Korea today taking responsibility for that and dismantling the coast guard -- John.

BERMAN: More ramifications from this tragedy.

Paula Hancocks, thanks so much.

ROMANS: There's an ominous new kidnapping threat against the school children in Nigeria. The Boko Haram terror organization targeting an all-boy secondary school now. Nigerian police ordered to beef up security at all boarding schools in the region. Meanwhile no progress -- 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.

And this is sort of part of the Boko Haram playbook, isn't it? A threatening letter and then sometimes, there's a strike that follows?

VLADIMIR DUTHIERS, CNN CORRESPONDENT: That's right, Christina. And people can only imagine what it's like, you're trying to get an education. You're sending your child to school in what is one of the least educated, one of the poorest regions in Nigeria. People there believing that education is the path out of that poverty. You send your child to school and you receive this letter that Boko Haram intends to strike your school.

Now in this particular case, they targeted a boys' dormitory. In the past, Boko Haram does not kidnap boys, Christine. In the last incident that happened back in February, they attacked a school, they slaughtered 40 some -- at least 40 boys. Many of them burned in their beds. Some that tried to escape were shot or were hacked to death with machetes.

The girls who were at that school, Christine, they were spared. They were told to go home, to stay away from school and to get married. That is the Boko Haram modus operandi. And that's what people in northeastern Nigeria are living under since 2009.

The bravery of these children that continue to go to school in the face of such threat is inspiring. When it comes to what the Nigerian military is trying to do to rescue these girls, the police and the military are outmanned and outgunned when it comes to fighting Boko Haram, Christine. These militants show up with rocket propelled grenade launchers, army personnel vehicles and you're talking about soldiers that have AK-47s and one magazine.

ROMANS: Unbelievable. So you're even getting a letter ahead of time saying that they're going to come, and still, the military doesn't have the manpower or the fire power to be able to match them. It must be terrifying, terrifying for parents who their children in boarding schools in the region?

DUTHIERS: Yes, in fact. We spoke to a mother yesterday whose daughter was kidnapped on April 14th. And I asked her if your daughter comes home, would you send her back to school? Because you can imagine, a parent just saying, you know what, this is not worth it. I can't deal with the pain and the loss should something happens to my child. And she said, of course, if she comes back, and I believe that she will, I will send her back to school. She will go back to school. She won't not want to go back to school. She will want to go to school -- Christine.

ROMANS: All right. Vladimir Duthiers, thanks, Vlad.

It's just shocking to think that, you know, they can send a letter and you can know they're coming and there's nobody who can do anything to stop it.

In San Diego now, the wildfires contained. We're glad to report, evacuated residents are returning to their homes. But California's governor is warning of a new fire threat that could be here to stay.

Our Indra Petersons is live from the fire lines for us this morning. Right after the break.

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ROMANS: Forty-one minutes past the hour. Welcome back.

Firefighters in San Diego finally contained the wildfires that left dozens of homes in ashes and forced thousands to evacuate. 26,000 acres burned since last week. California's governor Jerry Brown fearing the state's drought means a long and dangerous fire season ahead.

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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.

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ROMANS: Indra Petersons is on the fire line for us this morning. She's live in Escondido, California.

Good morning, Indra.

INDRA PETERSONS, AMS METEOROLOGIST: Good morning, Christine. You know, it's so tough now, after four days the firefighters battling these flames residents were not able to return home until many of them Saturday or even Sunday. And when they did, these are some of the sights we saw.

We're here in Escondido in a place called Harmony Grove. It's about 120-year-old a spiritual community where it was the hardest hit. And there are about 30 structures here and now when they were able to return Saturday evening and in through Sunday is when they saw this 25 of these structures completely reduced to rubble here on the ground.

So hard. I mean, I keep looking around in this for anything. A frame, a picture frame, a plate. There's nothing left here. So tough to see. And especially when you think about the fact this is one of the worst droughts in California history. So sites like this, this is what we're expecting in the future. Just take a listen to what Cal Fire had to say.

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

UNIDENTIFIED MALE: We're expecting extreme conditions. We're going to expect more fires this year already since January 1st. We responded to 1500 fires that are normal, it's around 800.

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PETERSONS: How scary, right? So many people keep asking me. Why? Why are we seeing fire season so early? If you're not from California you know that many people call it May gray. June gloom. Why? Because we have this (INAUDIBLE) of thick marine air that doesn't go anywhere. That is hardly the case the last month has been filled with record-breaking temperatures 25 degrees above the record. You've been seeing winds out here, 50 to 60 miles per hour and low humidity.

The reason why, it all goes back to the jet stream. There's this huge ridge of high pressure that was blocking all those storms that you normally want to see drop out of the coastline of California it was blocking them so with that, they we're getting these warm temperatures.

Here's get news. Today that ridge is broken down over the weekend. We already saw the relief. Today, we continue to see that relief. A storm system expected to bring rain to northern California is actually on the way. That's going to bring in the thicker marine air humidity up this morning. It feels great, even a chance for drizzle here by Tuesday and Wednesday.

Unfortunately, it doesn't mean there's no fire threat across the country at all, it just means that fire threat has spread farther to the east, let's say places like Arizona, New Mexico. That's where we have the elevated fire danger. There is rain somewhere in the nation today. It's the upper west Midwest in the northern plains eventually spreading into the northeast by the middle of the week.

Really, really heartbreaking to see those this morning. The residents didn't know what the status was for four days. And this is what they see when they return home.

ROMANS: Wow. All right, Indra, thanks for that and keep us posted.

An EARLY START on your money this morning. Features on Wall Street lower, pointing to a lower open after big swings in stocks last week. The Dow went from hitting records to triple-digit losses before (INAUDIBLE) back. That was all last week.

Corporate earnings have been driving stocks this year now that 90 percent of the companies, the S&P 500 are reported, we want to see how they did. Profits this quarter up 2.1 percent compared with last year. Much smaller increase than the prior quarter, when profits was up 8.5 percent.

All of this might explain why Treasure have been on a tail lately. The big action in markets, everyone, is in the bond market. The yield on a 10-year Treasury near a six-month low. 2.5 percent, look at that chart. You can see the yield declining. Remember declining yield actually means more demand for treasuries which are considered a safer investment than stocks.

And John, some people this morning are saying -- and for the past week have been saying, look at what's happening in the bond market. Is that telling us something that there is concern about the strength of the economy?

BERMAN: We need to tell these investors, you may very well be concerned about the economy going ahead.

ROMANS: Yes.

BERMAN: I have no concern about what's coming up on "NEW DAY." Kate Bolduan joins us to tell us what's going on there.

Hi, Kate.

ROMANS: Hi, Kate.

KATE BOLDUAN, CNN ANCHOR: I love your confidence. It really means something especially on a Monday.

Good morning, guys. We're going to be digging into a new kind of custody battle this morning. It's over embryos and who has the right to use them after a couple has broken up. We're going to talk live to a man who is fighting his ex-girlfriend now because she wants to have his child without his permission. You want to hear the details. It's an important case, though.

Plus also ahead, California Chrome is one race away from the triple crown. The elusive triple crown. But the horse may not even race at Belmont. Why? It's all about those nose strips, if you can believe it, that helps him breathe. They're not allowed in New York, so the horse may not even take part.

We're going talk to one of California Chrome's owners this morning to see what they're considering in terms of their options.

Unbelievable that that's the way that things might turn up.

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BERMAN: It is the most ridiculous story in the world today, what does New York have against breathe right strips? What makes New York, you know --

(LAUGHTER)

BOLDUAN: I'm not going to fight you. But why does a horse need nose strips, also an important question.

BERMAN: It promotes clear breathing.

BOLDUAN: Apparently, something I need this morning.

(LAUGHTER)

BERMAN: Exactly.

ROMANS: I know. You and I have the same voice, my friend.

BOLDUAN: I know. Not good.

ROMANS: All right, Kate Bolduan.

BOLDUAN: Thanks, guys.

ROMANS: Thanks, Kate.

Justin Timberlake took home top honors but Jennifer Lopez and Michael Jackson stole the show, stole the show at last night's Billboards Awards in Las Vegas. Timberlake won seven awards in all, more than any other artists, after a seven-year hiatus. His album "20/20 Experience" beat up Yaz and Drake for Top Album. Timberlake saying he was stunned by the announcement.

And take a look at Jennifer Lopez blowing away the audience with her performance of "First Love." She was honored with Billboard's Icon Award.

And everyone is buzzing about the Michael Jackson hologram. It rocked the house, the king of pop performing "Slave to the Rhythm" with a five-piece band and 16 live bands. The hologram took a year and a half -- or half a year actually to plan, choreograph and develop.

BERMAN: Apparently it's very difficult to work with in rehearsals. Made a lot of demand.

All right. 47 minutes after the hour. Happening right now, severe flooding across Serbia. Dozens already dead. Thousands evacuated from their homes. The worst flooding in more than a century, and now a new threat from landmines. We're live with the very latest.

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BERMAN: 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 mine company's operating manager, security chief and two engineers. The government says search efforts are now over with 301 people confirmed dead. An investigation into the cause is under way.

A bloody Sunday in Libya's capital Tripoli. Fierce fighting erupting after gunmen stormed the country's parliament demanding its suspension and a handover of power. Two people were killed, more than 60 injured in some of the worst fighting Libya has seen since the 2011 revolution that ousted Moammar Gadhafi.

Unprecedented flooding forcing thousands to flee for safety in the Balkans. Dozens have died already. Relentless rainfall in Serbia and Bosnia triggering more than 3,000 landslides and fears now that buried land Moammar Gadhafi mines from the Bosnian war could become unearthed and explode while rescuers are trying to do their work.

Atika Shubert, monitoring this for us. She joins us live from London this morning.

Atika, what can you tell us?

ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Well, the rains for now have stopped in the area but the big concern is that this sort of surge in the water is actually going to travel further down the river closer to the capital of Belgrade. So this is what they're concerned about now but as you mentioned, there's also this issue of landmines, of course, put there during the war in the Balkans and now a report that they have shifted because of all those landslides and floods. So rescuers have had to go much more slowly than they wanted to. There's already been dozens killed. And thousands have been evacuated out. And so this is hampering efforts.

The other concern is that one of the country's biggest power station now is threatened by the flood and it supplies 20 percent of the electricity to the country. So these are things that rescuers are grappling with on top of the water.

BERMAN: On top of the water, and they could reach another high over the next few days.

Atika Shubert, covering that for us from London, thanks so much.

Other news, a whistleblower goes public explaining what happened to her when she refused to cover up potentially deadly patient treatment delays at her VA hospital. We'll have this story next.

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BERMAN: We're now hearing from the whistleblower who triggered a federal investigation at the VA clinic in Ft. Collins, Colorado. Lisa Lee, a former Navy reservist, says she was suspended without pay for two weeks for refusing to cook the books to cover up long treatment delays for patients. Meanwhile, a top aide for -- in the White House said that President Obama is madder than hell about the scandal.

Treatment delays may have caused dozens of deaths at VA -- at a VA hospital in Phoenix. And widespread cover-ups are being alleged at VA facilities around the country.

Same-sex marriages could become a reality in Oregon by this afternoon. A U.S. district judge promising to issue a ruling by noon Pacific Time today on a constitutional challenge to the state's gay marriage ban. Now if this ban is overturned officials in Oregon's largest county plan to start handing out same-sex marriage licenses immediately.

This morning, a whole lot of eyes will be on the Wake Forest graduation ceremony. Why? Because Jill Abramson, the now fired executive editor of "The New York Times," will deliver the commencement address. It is not clear whether she'll respond to the reports since she was dismissed after finding out she made less money than her male predecessor and complained about it.

The publisher of the "Times" claimed she was let go because of performance issues. Very, very controversial. Rocking the media landscape, causing a whole bunch of discussion about gender and politics and policy, not to mention the future of media.

"NEW DAY" starts right now.

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MICHAEL WEINBERG, VICE PRESIDENT, PUBLIC KNOWLEDGE: The result of all of these mergers, there's less competition, there are fewer competitors.

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CHRIS CUOMO, CNN ANCHOR: Mega merger, AT&T buys DirecTV creating a giant TV and Internet company. Good for them. But good for you? Is your cable or dish bill about to go even higher? We have new details on the deal that's rocking the industry.

KATE BOLDUAN, CNN ANCHOR: On alert. The deadly MERS virus now confirmed to have been spread within the United States. An Illinois man contracted it by shaking hands. Now the CDC is racing to find anyone who may have been in contact with him.

MICHAELA PEREIRA, CNN ANCHOR: He's back. The performance that brought down the house at the Billboard Music Awards. Michael Jackson, the hologram, performing live. Thrilling? Realistic? Controversial? We'll get into it.

CUOMO: Your NEW DAY starts right now.

ANNOUNCER: This is NEW DAY with Chris Cuomo, Kate Bolduan and Michaela Pereira.

CUOMO: That's better.

BOLDUAN: Feel better now?

CUOMO: Good morning.