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Quest Means Business
Judgment Is Imminent For AT&T And Time Warner; Donald Trump Wants Fewer Nukes And More Condos In North Kores; British Prime Minister Makes Compromises And In Doing So Gets Her Brexit Bill Further Through Parliament; Japan Is Transforming Mobility For Those Who Struggle To Get Around, And That Includes Those With Disabilities Or The Elderly; FIFA Set to Vote on 2026 World Cup Host; AT&T-Time Warner Decision to Trigger Domino Effect; Trump Promotes North Korean Real Estate; Marijuana Cryptocurrency Soars After Rodman's North Korea Trip; James Clapper: Rodman Can Play Role with North Korea Talks; Rodman Describes Kim Jong-un Conversations to CNN; Judge Rules in Favor of AT&T-Time Warner Merger. Aired: 4-5p ET
Aired June 12, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: Stock exchange with a new company, ringing the closing bell, very popular as you can see, it is enough -- you don't
usually see them standing helping somebody else ring the closing bell. One, two, three -- there we go, three -- a good gavel, a good man, it's
Tuesday, it is the 12th of June.
Tonight, judgment is imminent for AT&T and Time Warner. We will know in the next hour if the US judge will allow the merger of these two giants to
go through.
The Singapore Summit, Donald Trump wants fewer nukes and more condos in North Korea. Is that what they talked about? And the British Prime
Minister makes compromises and in doing so gets her Brexit bill further through Parliament. There is so much in the next hour. I am Richard
Quest, live in London and yes, I mean business.
Good evening. Busy hour that you and I have together. A day for history books on every continent. We will have full analysis of the Singapore
Summit over the course of the program. You are also going to hear from two top chief executives on the British government's Brexit vote which is
working its way through the Parliament and we will also have the verdict, the judgment that corporate America has been waiting for.
Why is the corporate American? An entire media industry, the ramifications from Judge Leon's decision in Time Warner and AT&T will go far and wide
across the anti-trust rules. Moments from now, the Judge's decision will reshape media and set the standards for antitrust regulations in the United
States.
Judge Richard Leon will determine whether the $85 billion takeover of our parent company, Time Warner can go forward. Huge implications whichever
way you look at it for AT&T which insists it needs the deal to complete and for you and me as viewers as a member of company that control content and
distribution shrinks.
That is the courthouse. The leaders of corporate America deciding whether to go forward with deals of their own. That is the courthouse. As soon as
we have the decision, we will bring it to here on "Quest Means Business."
So, South Korea's Defense Ministry says, it needs to figure out exactly what President Trump meant when he announced that joint US-South Korean war
games will come to an end. The US President was talking to journalists and he spoke for more than an hour after his summit with Kim Jong-un. He
called the war games inappropriate and said he wants to bring the 32,000 US troops stationed in South Korea back home.
The two leaders signed that agreement in which Kim Jong-un reaffirmed his commitment to complete denuclearization and President Trump gave security
guarantees to North Korea and said this meeting was just the beginning.
(START VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I also will be inviting Chairman Kim at the appropriate time to the White House, I think it is
really going to be something that will be very important. And he has accepted.
(END VIDEO CLIP)
QUEST: Foreign affairs columnist, Bobby Ghosh joins me now. We can go backwards and forwards on whether it was worth it, what they discussed, did
they get all that Kim Jong-un said what he's done before. In a nutshell, though, before we parse it, was it worth it?
BOBBY GHOSH, FOREIGN AFFAIRS COLUMNIST: Politically, for both players, yes, and in any real terms, probably not. Donald Trump gets to play to his
base. He keeps a campaign promise. Kim Jong-un gets to parade on the world stage, gets both of them get an amazing photo opportunity. It gets
declared a historic moment just the fact that the two men met at all.
But then you parse the deal, you look more closely at the papers they signed and you realize there is not a lot there. This is all vague, it's
all sort of well-meaning words that don't actually amount to any roadmap that will lead us to where Donald Trump wants to go, which is a
denuclearized North Korea or even where North Korea wants to go, which is the full removal of economic sanctions.
Neither of those two destinations, we don't have roadmaps to either of them at this point.
QUEST: Right, but we were never going to get full roadmaps from a meeting that was thrown together in three months in such a fashion. And the
argument of course is that merely meeting -- I mean, the analysis I have seen suggest, look, merely meeting means that it's much harder now for any
form of armed conflict to take place.
GHOSH: That is if you believe that armed conflict was a likelihood even before this meeting. I personally don't. I don't think there was any
scenario in which the United States for one was going to war with a regime that has a million men army --
[16:05:16]
GHOSH: -- and nuclear weapons. There was a lot of rhetoric, it was overheated in my opinion, but it was never actually going to lead to war,
but that having been said, the fact that the two men have met and have agree to keep talking -- that second piece, that agreed to keep talking
themselves and officials below that level, that's probably a good thing.
Better jaw-jaw than talk of war-war, as Winston Churchill might have said.
QUEST: Indeed, and the "New York Times" puts it this way though, this afternoon, suggesting that actually, what you are really talking about is
containment within the existing parameters for North Korea rather than abandonment of nuclear weapons. If that is the case, and again, this is
"The Times," this is me, it suggests that really, you're looking at an Iran type of situation where all you're doing is aiming to contain rather than
abolish?
GHOSH: No, actually not as even as good as the Iran deal if we look at it again more closely. The United States is giving security guarantees to the
North Koreans, the North Koreans are not giving -- the word "guarantee" does not leave Kim Jong-un's lips even once during this entire discussion.
So, it seems like a very one-sided deal. I would disagree with the "New York Times" there. I don't think this is containment. This is enablement
in some degree. It basically takes North Korea's nuclear program and leaves it intact for an unspecified number of months, years going forward,
at the same time, unilaterally, without consulting with the South Koreans, President Trump announces that there will be no more war games. Those
military exercises which were a big part of the containment.
Keep in mind, for decades, containment has been the only option and those military exercises have been the main instrument, if you like of
containment, now that instrument has been taken off the table. Where is the containment?
QUEST: All right, Bobby, good to see you. Thank you.
GHOSH: Anytime.
QUEST: There's plenty for us to talk about that we will keep looking at this as we continue, there is so much. The thing we are watching out for
is the decision in the AT&T case -- the AT&T and Time Warner -- parent company of this network -- the Judge any time now, it may even have started
reading his judgment. As soon as we get an idea of what that judgment is, whence CNN will be bringing you that decision and the analysis, because
it's more than just a case about this company and AT&T, it is antitrust and it promises to change the landscape of corporate America. We will have
that in a moment.
Choppy is the best word to describe Wall Street's changing. Looking at the graph and you'll see what I mean. Although it was predominantly down,
having --
[16:10:16]
QUEST: -- been off very sharply at around what? Three o'clock in the afternoon, rallies back up again and ekes out just a small loss at 1.58 and
I think that that economy shows you more than anything else the nature of the market, the way indeed it rallied. And the NASDAQ closed at a record
high, so you have a record -- all the market, the two markets that barely made it -- sure did.
And if you look at the traveling trading post, it is the 19th record this year. Later in the week of course, when I am back in New York, we will
very much look forward to getting back to the trading post and changing the numbers actually for you on the boards.
Tesla shares ended in the day up. They've been as much as six percent higher after one analyst raised the forecast of deliveries of Model 3. It
fell back when Elon Musk confirmed the company will lay off 9 percent of its workforce. Paul La Monica is following it all.
The stock is still up though some 30 percent or 40 percent since its lows earlier in the year last year, so Musk is doing something right.
PAUL LA MONICA, CNN CORRESPONDENT: Yes, I think that investors clearly do believe Elon Musk when he talks and tweets about these ambitious goals for
when Model 3's are going to be delivered to consumers and start hitting the streets. Of course, the problem that Tesla has faced is that, they have
been going for a lot of cash, and they have been losing money and unfortunately, for workers that is going to mean that there will be some
layoffs and I think, you know, the sad reality is that Tesla bulls will probably applaud this because it may finally show some financial discipline
from Elon Musk which isn't something that I think is always associated with him.
QUEST: Right, so the first point of course is, will they meet their however many thousand, I think it was 5,000 or whatever Model 3's that they
are expecting to produce. They are getting close to it with 3, 000 to 3,500, to 4,000 -- so that's the first issue.
But then of course, there is the ramp up of production over the whole model range and the trucks and all the other things. Is there a feeling that
Tesla has pardoned upon, turned the corner?
LA MONICA: Yes, I think that the key question is does Tesla have the financial resources to do everything that Musk ambitiously wants to do. As
you pointed out, Richard, there is the Model 3. There is the Model S and Model X of course, and then there is the semi-trucks and then they are also
still integrating Solar City, which is going to be building solar roof panels on homes and other buildings. Musk has a lot on his plate just at
Tesla.
Then you have SpaceX, you have the Boring Company, you have all of these tweets that he is lashing out against the media. He is a very busy guy and
I think it's a question of whether or not he can accomplish everything that he is setting out to do because he is just one person and last I checked,
cloning was not one of the many things that Musk is working on.
QUEST: No, Paul, you and I have argued and discussed this before. I am in the camp that says the guy is a visionary. Yes, he may be a bit weird and
bizarre occasionally, but he has done more in a short period of time than most Chief Execs do in their entire life.
LA MONICA: Oh, I am not by any -- you know, I am not at all trying to say that Elon Musk should be criticized for having the great visionary ideas
that he has, but there is a difference between doing what he does and saying that you're going to do something and being able to actually
accomplish it.
And, you know, also, I don't remember Steve Jobs and other visionary repeatedly bashing the media the way Musk does as well. So, from a self-
serving standpoint, it's a little frustrating that Elon Musk lash out at us all the time.
QUEST: Care to take a punt on what Judge Leon is going to decide.
LA MONICA: I am not going there at all. We are going to find out very soon, so I will punt on taking a punt.
QUEST: All right, but I think you'd agree whichever way it goes, I was just thinking about this. Whichever way it goes, the landscape for
antitrust and corporate America, never mind just the media industry, shifts, if he decides in favor of AT&T-Time Warner, then the vertical rules
change.
If he decides in favor of the Justice Department, then they most certainly change. So, whichever way this goes, what do you think?
LA MONICA: Yes, I think it is safe to say that if Judge Leon rules in of AT&T and Time Warner and doesn't put may condition on the deal. There
likely will be other media mergers coming and the other thing I think, Richard is if this deal does go through, I can tell my mother, "I work for
the phone company," and she might finally have some understanding of what I do for a living.
QUEST: She might finally say, "You've got an honest job." You've got an honest job and you're working for a real company, and you might know that
nonsense on the media. All right, Paul La Monica, Guru La Monica.
LA MONICA: Thank you, sir.
QUEST: There is an ace to stop the rebellion --
[16:15:16]
QUEST: -- by comprising with the MPs who wanted the final say on Brexit. Now, some of the main supporters had wanted a more definitive say if they
disagreed on the Brexit deal. It would have undermined the Prime Minister's negotiating ability in the long run. That's according to the
Brexit Minister.
(START VIDEO CLIP)
DAVID DAVIES, BRITISH SECRETARY OF STATE: The government cannot demonstrate the flexibility necessary for successful negotiation if its
hands are tied midway through the process. That will do nothing but guarantee a bad deal for Britain.
(END VIDEO CLIP)
QUEST: It was the key vote on a string of amendments that was proposed by the Upper House of Lords. A former Justice Minister has resigned ahead of
the vote saying that Brexit is detrimental to business. Now, the Minister -- the former Minister Phillip Lee said, "In extensive consultations with
local employers -- large and small -- I have been warned that they expect Brexit, as it is currently being pursued would have a negotiated settlement
will damage their business."
This shows the febrile nature of the British tabloids where absolutely, unequivocal about the role of Parliament that it has to say Brexit. If you
look at the "Daily Express," "Ignore the will of the people at your peril," and "The Sun" delivered a warning to MP's, "Great Britain or Great
Betrayal." Now, you can't necessarily see this here, but if you noticed, on the cover, it is peppered with British icons.
You've got the Angel of the North in Northern England, you've got the mini car, you've got the red bus and of course, you've got the red arrows and
you've got a spit fire. You could see more on the picture there.
Tim Martin is the Founder and Chairman of JD Wetherspoon, a branded hotel chain, he joins me now. I think I am not doing you a disservice when I say
you are an ardent Brexiteer.
TIM MARTIN, FOUNDER AND CHAIRMAN, JD WETHERSPOON: I have been called out, Richard, and I won't argue, you're right.
QUEST: All right, and so you have a plan, you have a policy. You have an idea of what you think this should look like afterwards. You can't be
pleased with the way it is going at the moment.
MARTIN: I think it's turning into a bit of a dog's dinner. I think that the government should approach the negotiations in another way. The EU is
a protectionist system. It charges tariffs. We could have made food and everything else cheaper in the shops. We have eliminated the tariffs and
just left the EU and instead of paying them 39 billion, we could have allocated that money to UK consumers, so you wouldn't have had -- we could
have regained control of our fishing.
If you'd done those three things, you wouldn't have been reliant on the EU. We would be better off now and I think we would be better off than if we
had a deal.
QUEST: But you couldn't not pay the exit bill. I mean, in the sense that that would be reneging on previously agreed expenditure that the UK signed
up for.
MARTIN: Well, I understand that the legal advice on that is there is no legal obligation to pay it and certainly, and certainly, no one has turned
around and explained to the British public or even the media exactly on what basis there is some sort of obligation to pay that. I think we are
paying it to try and persuade them to do a free trade deal.
QUEST: Would you be in favor more of a -- as the FT put in this morning, the Donald Trump approach? Tell them where to go, tell them where to stick
it and if they don't like it, end of subject?
MARTIN: Well, the trouble with Donald Trump is he is a divisive character. I would go for the approach of saying, we want to be friends with you in
the EU, you are very good suppliers. You are nice people, but we aren't dependent on a deal with you. This is what we are going to (inaudible) --
(CROSSTALK)
QUEST: But we are -- this is the problem here. Every business person I speak to says that if we crash out of the EU, then the effect will be
devastating on the British government.
MARTIN: That is a complete fallacy and it is just politics transferred into the minds of the Board rooms who have argued that if we leave the EU,
its protectionist system, prices in the shops go down plus, we don't have to pay them $10 billion a year, plus, we regain control of our fishing
market, plus we --
QUEST: But every company that does business across the channel will suddenly be faced with a level of complexity that they don't currently
employ. It would crash out.
MARTIN: No, because you abolish tariffs for the rest of the world, America for example, no tariffs and that means no tariffs from the EU. So you
would be in a better position. The main thing to understand is the EU is 7 percent of the world, it is a protectionist system, it has tariffs for the
other 93 percent -- abolish it, get out of the EU, you're trading with 93 percent of the world. We will get our prices down and our pubs tomorrow
for food and drink, if we leave the EU and the customs union, a lot of people in Britain just don't understand that, but that is the truth.
QUEST: But if you're told as we are that 40 percent of the exports do go to the --
[16:20:15]
QUEST: -- and it's more, it's about 50 percent to 55 percent, do go to the EU, they will be tariff-ed immediately by the other side, and even if
they are not tariff-ed, there will be a complexity to doing this. Let's forget about Northern Ireland there, that's entirely different. Let's just
talk about on the back burner at the moment. There would be a difficulty in just saying goodbye, turn the lights off.
MARTIN: None at all. We trade with the EU. We buy champagne, we buy wine et cetera, we can switch tomorrow and eliminate all trade with the EU if
you want to and get wine from America, from the new world, Australia et cetera, from South America, and it's not going to make an iota of
difference.
It will force the EU to become more competitive. At the moment, we sell -- the top selling house wine is from Australia and New Zealand and it has got
a tariff, so why should our customers pay tariff to Brussels?
QUEST: Now, one thing that is clear, the EU has fought harder to maintain the integrity of the single market. Now, they always said they would, but
the British people were told by Brexiteers, not you particularly, but by others they were told when push comes to shove, when the crunch time
happens, the EU will cave so far -- but that does not appear to be the case.
MARTIN: They will cave in five minutes flat if we say we are going to leave without a deal. We are going to abolish all tariffs and if you dare
charge us tariffs, watch your BMW sales and your champagne sales, we are the second biggest market for both those products, I think in the whole
world, go to zero.
QUEST: And they are prepared to accept that. Someone is saying -- someone said that is the price that Merkel will tell her people, "That's the price
we are going to pay."
MARTIN: I am going to have to swear in television --
QUEST: No, you're not.
MARTIN: But no, you're wrong. You're wrong.
QUEST: Tim, it is always good to have you. I noticed, there's been a lot of talk about champagne, a lot of talk about all of these things and there
is no evidence of it in front of us.
MARTIN: I am disappointed.
QUEST: You're the hotelier and hospitality, man, you should be -- good to see you, Tim.
MARTIN: Thanks a lot.
QUEST: As always. European markets have ended the day mixed. The FTSE 100 closed down by 0.42 percent followed by the CAC 40 in France.
Japan is transforming mobility for those who struggle to get around, and that includes those with disabilities or the elderly. In "Business
Frontier," Anna Stewart looks at how tech is making their lives easier including wheelchairs on demand.
(START VIDEO TAPE)
ANNA STEWART, CNN CORRESPONDENT: Approximately 15 percent of the world's population has some form of disability according to the World Health
Organization. And for those one billion people, a routine every day task can be a daunting ordeal.
Kanai was 10 years old when she was diagnosed with muscular dystrophy. Four years ago, age 20, a wheelchair became a key to her mobility. After
being impressed by the Whill electric wheelchair, she decided to start working for the company.
KANAI, WHEELCHAIR USER: (Through an interpreter). Japan has limited space in public facilities like this market. So, wheelchairs need to be agile.
When I was using an ordinary wheelchair, I used to check on Google Maps to look for obstacles in the streets that might block my mobility.
Now, I can go over most of that, so I do not need to prepare in advance.
STEWART: That's because Whill uses the omni wheel, a normal wheel surrounded by many separate tires which all rotate. It means, these chairs
can both bridge gaps and still turn in a tight radius.
It is not the only company to make these advances in personal mobility vehicles, but Whill's latest innovation is set to take its unique features
to another level altogether.
Introducing the autonomous wheelchair.
UNIDENTIFIED MALE: (Through an interpreter). It's like either you have an app and you call up the wheelchair. It arrives, you use it, and then
release it when you're done.
STEWART: And it's not just designed to help disabled people. It could help Japan's aging population, too.
UNIDENTIFIED MALE: (Through an interpreter). There is a negative image associated with wheelchairs. Many people say they would rather stay at
home rather than use a wheelchair, which means they stay inside and become an (inaudible). They are physically and mentally -- if we can change the
image, we can help more people go out and live a healthy, full life.
STEWART: Working in collaboration with Panasonic, the autonomous wheel launched a trial at Tokyo's Haneda Airport, and now Panasonic hopes the
technology will be rolled out in time for the Tokyo Olympic Games.
UNIDENTIFIED MALE: (Through a translator). Come 2020, we would like to make this kind of mobility available not only at airports, but also in
towns and stadiums. Handicapped people have few chances to go to the stadium for sports games, so we hope they can go to sports venues and
paralympic games. We hope that people say the world changed after 2020.
STEWART: And it's not just about boosting confidence day to day. This has helped boost Kanai's hopes for the --
[16:25:16]
STEWART: -- future.
KANAI: (Through an interpreter). My disease will progress, but the new technology will allow me to do more. And to live the way that I do now.
I don't know what ability I might lose next, but I have hope now that this technology will solve the problem.
STEWART: Anna Stewart, CNNMoney, Tokyo.
(END VIDEO TAPE)
QUEST: So, it has been 598 days since AT&T announced it had agreed to buy our parent company, Time Warner. A judge's ruling at the moment in the US
on whether that mega merger can go forward, and to do so, will change the landscape for antitrust in corporate America. We will have the details
with QUEST MEANS BUSINESS.
Hello, I am Richard Quest. There is more QUEST MEANS BUSINESS in just a moment when the Chief Executive of Lloyd's of London is on the hunt for the
next big tech entrepreneur, Inga Beale, will be with me right here in the studio.
Donald Trump says he sees potential for condos in North Korea. I will speak to a man who takes tourists there already. As we put them all
together, this is CNN and on this network, the news and the facts will always come first.
World leaders have praised the unprecedented summit in Singapore between the North Korean leader and the US President. Israel's Prime Minister
called it an important step comparing to Donald Trump's strong stance against Iran. Germany's Foreign Minister says the talks laid for
foundations for further nuclear negotiations.
Any moment now, a US Federal judge will issue his decision on the $85 billion merger between AT&T and our parent company, Time Warner. The judge
could approve the merger, block it or post various conditions. The US government is suing to block the merger on competition grounds. AT&T
argues it needs the deal to compete with today's tech giants.
The White House Economic Adviser, Larry Kudlow is to remain in the hospital after suffering a heart attack yesterday. The White House says it is for
standard precaution and that his doctors expect him to make a full speedy recovery. CNN contributor Stephen Moore says he will be back on the job
soon.
A French photographer with close links to the Nobel Prize organizers has been charged with rape. Jean-Claude Arnault has been at the center of a
sexual harassment scandal which forced the postponement of this year's literature prize. He is accused of raping a woman twice in 2011.
Arnault's lawyer is saying his client denies the charges.
FIFA will vote only hours away for the 2026 World Cup host. It is a unified bid from Canada, Mexico and the US and is promising to generate $11
billion in profit for FIFA.
[16:30:00] But Morocco's competing bid hope against the unforeseen political boost. One Morocco committee member says presidents feud with
Canada and Mexico is undermining the case on North America. It's the anti- trust case of the century. A court room drama which has bided two giants of corporate America against the Trump administration.
On one hand, U.S. Department of Justice, on the other, AT&T and Time Warner; the parent of this network. Now, these are the players in their
own words.
(BEGIN VIDEO CLIP)
JEFF BEWKES, CHIEF EXECUTIVE OFFICER, TIME WARNER: By combining with AT&T, we can accelerate the process of introducing innovations on a nationwide
basis.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm not going to get involved in litigation, but personally, I've always felt that that was a
deal that's not good for the country.
RANDALL STEPHENSON, CHIEF EXECUTIVE OFFICER, AT&T: When we announced this deal, the best legal minds in the country agreed that this transaction will
be approved since our companies don't even compete with each other. But here we are.
(END VIDEO CLIP)
QUEST: Now, the analysts believe a decision will trigger a domino effect across corporate America once it takes place. So keep the AT&T domino
towards, yes, are more likely than Comcast will fight for 21st Century Fox and that's been of course against Disney, that's a huge bid in its own
right, another global bid.
It could then bolden CVS; the drugstore trying to buy Aetna, another vertical, and that's a deal worth $69 billion. And then you got the
smaller media companies than AT -- no, taking on the giants. Now, that's the new -- that way.
But tip the dominos towards no deal or Time Warner may break up, you can see the selloff of Turner, which is our parent and CNN, which is part of
Turner. It would show the Justice Department is taking an activist role for AT&T on competition grounds.
The trouble for mergers between Sprint and mobile would also -- T-Mobile would also be absolutely in trouble, all of which if the Justice Department
prevails in this case. And when you put it all together and you see all the various different manifestations and the dominos that can fall, you
realize that it all hinges on one little tip of the domino.
It all starts with one little push. Dylan Byers is CNNMoney's senior reporter for media and politics and joins me now. Which way -- oh, you
don't have, you can plead the Fifth on this.
(CROSSTALK)
DYLAN BYERS, CNNMONEY SENIOR REPORTER FOR MEDIA & POLITICS: What I will say is you can't sort of read the tea leaves here in the fact that the
judge has invited the media back to hear his ruling which he's going to read out loud.
Usually in a case like this, you just have a written ruling because there's a simple decision one way or the other and then the dominos fall as you
showed one way or the other. So what that says to me is that he's going to have a complex ruling -- it's very likely and I think this is the
conventional wisdom right now among analysts and the media, that he will approve the deal, but he will approve the deal with certain conditions.
Now, that's just a conventional wisdom, anything could happen here. The fact that this even went to trial and took 500-plus days was not something
I think that AT&T and Time Warner anticipated. So, we're on pins and needles here waiting to see what happens.
And like you said, the ramifications for the industry are enormous.
QUEST: All right, the way in which it moves forward. So for example, if AT&T loses, if -- and Time Warner lose, does that transaction fall apart
because the deadline is next week to complete the deal, and after that deadline, either side can if they wanted to get out.
And what we hear of course is, there are some who are saying, since the fall in AT&T share price, actually Time Warner would be wise to look
elsewhere.
BYERS: Well, look, I do think it would be a major blow to have the judge rule against the deal. I think what happens after that, look, there's
always the possibility of appeal, there are various ways this can go. But yes, it would conceivably, it would put Time Warner back on the market.
And then the question which she poses, do you then break up the Time Warner assets, all of a sudden are things like "Hbo", Turner, CNN, are they
looking for buyers elsewhere? But you know, the -- part of the issue here with the judge's ruling is what's really in question is what right do
telecom companies and tech companies have to buy a media acquisition?
[16:35:00] And if you say no to that, you put a freeze on potential M&A across the board, at least, you know, conceivably through the rest of the
Trump administration. If you say yes to that, you open up the flood gates of mergers and acquisitions and media that may ultimately result -- you
know, you look now, we've got really about across the tech, media and telecom space, about 16 big companies.
Ten years from now if this deal goes through, all of a sudden, you could have half that money. And you could really be talking about a future where
all media is owned by technology companies and telecom companies and is becoming increasingly hard to really understand the difference between
those players since they are all playing in the content game, and they are trying at least to bring that content direct to consumers without any
middle men.
QUEST: The judge knows his stuff, doesn't he? I mean, here's one of the experts in not only anti-trust, but also having done the Comcast-NBC case,
so in many ways would be regarded as the right -- the right judge on the right case.
BYERS: He is and there's been a lot of -- there's been a lot of cloud around this decision, about sort of, you know, was there any political
influence here from President Trump in terms --
QUEST: Right --
BYERS: Blocking this deal, even because CNN, our network was involved. At the end of the day, this is coming down to a judge who like you said has a
great deal of experience, who to the best of our knowledge adheres very close to the letter of the law and will make a decision based off of not
the considerations of executives or --
QUEST: Yes --
BYERS: Politicians, but of the considerations of the consumer. And that is that, at the end of the day is all you can hope for.
QUEST: Haven't you got a newsletter to go and write?
BYERS: I do, I actually do, get sort of benign for the start on tomorrow's newsletter.
QUEST: Then let me stop you because there's a newsletter, we'll have a lot more on this once we have the decision. Thanks Dylan, it's called --
(CROSSTALK)
BYERS: Thank you --
QUEST: It looks as -- well, the worlds of technology and media, some would say collide, I might say come together, co-exist, it's a pacific --
cnn.pacific.com to make sure you subscribe.
Donald Trump is sometimes referred to as the CEO and chief, the real estate mogul inside scenes derides the surface as he spoke to the press after
meeting North Korean leader.
(BEGIN VIDEO CLIP)
TRUMP: We have great beaches. You see that, whenever they're exploding their canons into the ocean, I said, boy, look at the view, wouldn't that
make a great condo view.
And I explained, I said, you know, instead of doing that, you could have the best hotels in the world right there. Think of it from a real estate
perspective.
(END VIDEO CLIP)
QUEST: It's hard to even go further with this one. And the president even brought a Hollywood-style four minute trailer to the summit, strengthening
his pitch, look at this short clip.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: A new world can begin today, one of friendship, respect and good will. Be part of that world where the doors of opportunity are
ready to be opened, investment from around the world where you can have medical breakthroughs and abundance of resources, innovative technology and
new discoveries. What if?
(END VIDEO CLIP)
QUEST: North Korea's made recent efforts to both destroy some industry, it's improve the airports and hotel options in sea-side city of Wonsan
previously used for missile testing.
Joining me is Simon Cockerell, the General Manager of Koryo Tourism, specializing in leading trips to North Korea. Just how many people go to
North Korea?
SIMON COCKERELL, GENERAL MANAGER, KORYO TOURS: Well, many tens of thousands actually, the vast majority of them being mainland Chinese
businesses. Of the non --
QUEST: Right --
COCKERELL: Chinese businesses, around 5,000 or so per year as tourists.
QUEST: So you're from a low base, you have the potential for a huge growth. Are you seeing more interest from people. Obviously, following
the awfulness of places -- of death of people like Otto Warmbier and the like.
There have been other reluctant to even set foot in the place in case something goes wrong --
COCKERELL: Well --
QUEST: But that could change.
COCKERELL: Yes, I mean, actually the numbers were much lower several years ago, just a few hundred people. Since around 2012, the numbers have been
fairly steady, four to five and a half thousand people per year. These are very low numbers of course.
The first half of last year was the biggest six months first day in our industry, and then the second half was very small, thanks -- well, due
largely in part to the Warmbier case that you mentioned, but also the nuclear tests, missile tests, the whole drama of North Korea.
The -- you know, the threats and the rhetoric pouring out. But there's been a bit of a recovery, but the numbers again are very small, so small
enough that a handful of people can suddenly make it seem like a it's resurgent.
So there's room for growth --
QUEST: Yes --
COCKERELL: Only so much actually.
QUEST: OK, well, that's because of infrastructure and the like. And when Donald Trump, you heard just earlier, you heard him talking about -- I
mean, you can't take the real estate man or the builder out of him, can you?
[16:40:00] He took it -- he immediately sees it and immediately wants to talk, put up condos and beach resorts.
Is this at all realistic that North Korea could develop some form of significant tourism industry?
COCKERELL: Well, he's a little late to the game on that, because on the Caramoan Peninsula, opposite the city of Wonsan, the exact area he's
referring to for -- where there are artillery barrage took place not so long ago. There's a tourist resort under construction, now a 100-plus
buildings.
Who it's being built for, nobody is quite sure, probably more domestic tourists or a kind of aspirational hope that more Chinese tourists and even
South Korean tourists will visit, because the western tourist market, the market -- my company Koryo Tours has no need for tourist resort of a 100
buildings.
So it is possible as you said, new international airport has been built, but so far, after a year, nearly two years of operation, that airport has
received a little of handful of flights. So it's something for the future --
QUEST: Right --
COCKERELL: Shall we say, not for the near future, maybe.
QUEST: And if I was to go for my annual vacation to North Korea, what's the one thing I must see?
COCKERELL: That's a good question. If it was your first trip to North Korea, the one thing you should see, I would say would be the capital city
Pyongyang and at least one other place outside. So most tourists go to the demilitarized zone, DM Zone or DMZ on a de facto borderline with South
Korea.
But I just returned from my 170th trip actually last week, and I spent most of that trip on the east coast, in Wonsan, industrial city --
QUEST: Right --
COCKERELL: Of Hamhung and the diamond mountain area. So you should get out of the capital and see not just where the middle class and the consumer
class live, and try and get a sense of a cross-section of society as much as you can in a very restricted place and in limited time, of course.
QUEST: Thank you sir, thank you for joining us. Now, the experts are arguing vividly over who was the winner and loser from the Singapore
Summit. As one group that definitely won, PotCoin.
Marijuana cryptocurrency supported Dennis Rodman's trip, it was at numerous amounts today, 13 percent, 14 percent. While Rodman's trip had been
accused of being able to visibly (INAUDIBLE).
The former U.S. head of National Intelligence said he could actually make a difference.
(BEGIN VIDEO CLIP)
JAMES CLAPPER, FORMER UNITED STATES DIRECTOR OF NATIONAL INTELLIGENCE: He is a unique person since he has a relationship with both Kim Jong-un and
with Donald Trump. And obviously has great rapport with Kim, who is a basketball fanatic himself.
So I think that there's a potential here to engage Dennis Rodman in a serious way in promoting this relationship.
(END VIDEO CLIP)
QUEST: Dennis Rodman spoke to CNN during the summit itself, and his passion for North Korea's future was obvious.
(BEGIN VIDEO CLIP)
DENNIS RODMAN, FORMER BASKETBALL PLAYER: I talked to Kim Jong-un and an administration over there five years ago. And he asked me five years ago,
we sat down for lunch, and he sat down and asked me, hey, Dennis, I'll like to ask you three things if you go back to tell the president of the United
States these three things and I will be willing to talk to him.
And this is a true story, and I got my people here that was there that heard the conversation. He said things like, if they can move the ships
from South Korea, I would do what I have to do to listen.
If you can lose certain things, do certain things, I will listen, my ears will be open. And I tried to do that to Obama and Obama didn't even give
me the time of day. I asked him, I said, I have something to say from North Korea, he just brushed me off.
But that didn't deter me, I still kept going back, I kept going back, I kept going back, I showed my loyalty and my trustworthiness to this
country, and I said to everybody, I said the door will open.
It was amazing, it's amazing when I said those things -- when I said those damn things, when I went back home, I got so many death threats, I got so
many death threats, so I was sitting up, protecting everything. And I believe in North Korea.
And when I went home, I came into a home, I came into a home after a hideout for 30 days, I couldn't even go home, but I kept my head up high,
brother, I knew things will change, I knew it, I was the only one, I never had no one to hear me, I never had no one to see me.
But I took those voice, I took all that, I took everything, everyone came at me, but I'm still standing. It took days, some great days -- now,
everybody say therefore, talking of China, everybody, it's a great day! I'm here to see it, I'm so happy.
(END VIDEO CLIP)
QUEST: And with that, we'll take a break.
[16:45:00] (COMMERCIAL BREAK)
JAKE TAPPER, CNN CORRESPONDENT: We've got breaking news. A judge has just ruled on the AT&T and Time Warner merger. Of course, we need to point out
that CNN is a unit of Time Warner. CNN's Justice Correspondent, Jessica Schneider is live for us at the courthouse. Jessica, what can you tell us?
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well, Jake, quite simply, the judge in this case, the federal district court judge has essentially
approved this merger between AT&T and Time Warner, AT&T's acquisition of Time Warner.
I just got out of the court room, Judge Richard Leon for 30 minutes read his opinion and at the end of it, he said that basically, the government's
three series of harm, all three series, they did not meet their burden of proof to show that there will be a substantial lessening of competition if
in fact AT&T acquired Time Warner.
So again, this was a six-week trial, the judge ruling today that this merger can in fact go forward. And beyond that, I mean, this is really a
complete and total wimp AT&T. And what could happen at this point forward is that the government after losing in this case, they could ask for a stay
of this opinion as they go for appeal.
And what's important about that is that could effectively render this deal dead. You know, this deal would have to go through by June 21st, that's
the merger deadline that has been set by both AT&T and Time Warner, that at which point either party, either company can walk away.
With the end of his ruling here, after the judge said that the government has failed to prove that the judge should deny this merger. The judge went
even further than that, and the judge said to the government in very stern words, think before you go to the appeals process with this.
Think before you move for a stay here. He said that AT&T had already suffered harm in this, given that the government has been working to block
this merger since this -- since the lawsuit in November and since the trial started in March.
I just want to -- you know, a bit of the language that the judge gave here. Again, it was quite stern towards the government. He said I hope the
senior leadership of government will see how unlikely it will be to get a stay and how manifestly unfair it will be when deciding whether to seek
this stay.
So the judge warning the government after the government has lost this case which the government argued for six weeks here at this federal courthouse,
saying to them, think twice here before you move forward with any motion to stay, whether you move forward with any plans to appeal.
Because again, Jake, this merger deadline is just days away on June 21st, if the deal doesn't go forward by then, either party could walk away from
this. So that is why the judge had to get this ruling out today to allow that appeals -- time for appeal.
So again, Jake, to reiterate, the judge here in this case has effectively approved this merger to go forward, pending any appeal or motion to stay by
the government. But again, the judge warning the government think twice before you do this because the judge says I don't think you have a great
case on appeal. Jake?
TAPPER: All right, Jessica Schneider at the court house for us, I want to bring in CNN's chief legal analyst Jeffrey Toobin. Jeffrey, on the face of
it, it looks like a setback if not a big defeat for the Trump Justice Department. What's your take?
JEFFREY TOOBIN, CNN LEGAL ANALYST: I would say it's a setback and a big defeat for the Trump Justice Department. I mean, this was a scathing and
total rejection of the government's theory that this merger would violate anti-trust law.
But we have not yet had access to the 470-page opinion of Judge Leon. But you know, he went through each of the government's theories of why this
merger would lessen competition and be bad for consumers. And in each case, he rejected the government's contention that this would be a bad
merger for consumers.
[16:50:00] And then as Jessica told you, a really unusual part of his opinion was him saying to the government, look, don't even bother appealing
because if you appeal, if you get a stay, you will kill the deal even if you -- that -- the appeals court ultimately sides with AT&T and Time
Warner.
That the procedure will take over for the substance. So he was saying, look, admit, you lost and let this deal go forward. You can sue later, he
said to the government to break up the company, but don't try to stop this merger at this late day.
That was a very unusual thing that the judge did, and it's basically a sign of how much he rejected the Trump Justice Department's arguments in this
case.
TAPPER: And Jeffrey, let me ask you, President Trump, when he was just candidate Trump during the 2016 presidential campaign, he expressed
opposition to this deal. Now, on its face, his opposition, his political oppositions seemed rooted in the fact that he obviously does not like CNN
and Time Warner is our parent company.
The Justice Department attorney arguing against this merger on anti-trust grounds. How much did any of it had to do with President Trump's political
argument and stated anonymous CNN.
TOOBIN: You know, you know, Jake, that is in many respects the most interesting part of the case, and it never appeared in the court room.
Judge Leon, at the very beginning of the case said to both parties, I am not going to examine the political motivations of the Justice Department.
I am not going to even let Time Warner look at whether there were communications between candidate Trump, President Trump and his Justice
Department about this case. I am not going to allow that to be in the evidence presented at all.
So that was not part of the case. The judge decided this case solely on the grounds of anti-trust law, not on the motivations of the Justice
Department. And now, in light of this extremely comprehensive rejection of the government's theory, certainly, many people will ask, why did they
bring this case at all? Because of candidate Trump's outspoken opposition to it.
But in terms of the evidence in the court room, Donald Trump, President Trump's statements about the merger never played a part.
TAPPER: How fascinating, stay there, Jeffrey, I want to bring in CNN senior media correspondent Brian Stelter. And Brian, what stands out to
you about this position, about Judge Leon.
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Well, this is a ruling that will be heard throughout the business world. It's a shock that's going to
cause a lot of other reactions. We're going to see Comcast in the coming days, go ahead and challenge Disney for Rupert Murdoch's 21st Century "Fox"
assets.
We're going to see other mergers and acquisitions now as a result, all because there was essentially a holding pattern all waiting for this
ruling. And there were many companies watching on the sidelines, wondering what the judge will do.
And now that we have the answer, and the answer is so clear, you know, this is not a ruling with a lot of conditions as many expected, there are not a
lot of strings attached, it sounds like there are no strings attached, it is a very clear and comprehensive ruling, so it's a giant thumbs up for the
American business world.
And that's why beyond just the media industry, it's an important moment for American business, they be given a thumbs up to go and pursue some more of
these deals. In terms of our channel and our parent company, we're going to see AT&T move quickly to try and close this deal now.
It's been more than 18 months since the deal was struck, since this attempt to do this acquisition was announced, it's been a very long road, there's
an opportunity of course associated with this, with this trial and with the long delay.
And so now AT&T -- unless there's a stay, unless there's an injunction, unless the government goes in and tries to get that, then we'll see these
two companies come together next week, so just six days from now, CNN will be owned by AT&T.
TAPPER: And let's go back to CNN's Jessica Schneider who is live at the court house, and Jessica, you have a statement from the lawyer from the
Justice Department -- from the Trump Justice Department about the case. What does he have to say?
SCHNEIDER: Great, Jake, a swift reaction from the Department of Justice Makan Delrahim; he's the Assistant Attorney General in charge of the
Antitrust division. He was in the court room today, he was in the court room throughout this six-week trial, just now issuing a statement here,
I'll read it for you.
He says "we are disappointed with the court's decision today. We continue to believe that the paid TV market will be less competitive and less
innovative as a result of the proposed merger between AT&T and Time Warner.
We will closely review the court's opinion and consider next steps in light of our commitment to preserving competition for the benefit of American
consumers." So the Department of Justice there, Makan Delrahim not saying whether or not the government might seek a stay, might go forward with an
appeal or start something, the judge warns sternly against.
[16:55:00] And it's interesting that the Department of Justice and its statement still holding to their argument that this acquisition, this
merger would be anti-competitive especially because the judge just spent 20 minutes in court, knocking down each and every argument line by line, bit
by bit.
The judge in fact at one point in terms of one of their argument put it this way, he said neither category of evidence was effective, it was too
speculative in nature, it was contradicted by the government's own evidence, and at the end he said, this evidence had little to no value.
But in this statement from the Department of Justice, Jake, Makan Delrahim; the deputy -- the Antitrust chief seeming to stick by the government's
argument and not giving an indication whether they'll take heed in the judge's warning not to move forward on the appeal. Jake.
TAPPER: All right, Jessica, thank you so much. Let me bring back Jeffrey Toobin, and Jeffrey, obviously, just to remind our viewers, CNN has a
vested interest in this major case because Time Warner is our parent company. Putting that aside for a second and putting aside whether or not
this is the right decision by Judge Leon or not.
Is it consistent with the Trump Justice Department and its attitude towards business? In other words, does trying to stop this merger make sense
because of the other principles and ideals that the Trump administration argues for either through the Antitrust division of the Justice Department
or elsewhere.
TOOBIN: You know, Jake, that is incredibly important question. And that is why there has been so much suspicion about the motives behind the
Justice Department's decision to try to stop this merger.
Republicans in general, conservatives in general, going back to the days of Robert Burke(ph) who was sort of the great genius of conservative view of
antitrust law have taken a hands off view towards mergers.
They basically had a laissez faire approach, the government should stay out of the business of regulating, of stopping mergers. What makes people --
what made people so suspicious of the government's motive in this case was that here you have a Republican Justice Department trying to challenge
after merger.
Even more unusual was the fact, what this is known as what's called a vertical merger where AT&T and Time Warner are not competitive. They are -
- Time Warner is a supplier of content to AT&T, vertical mergers like that are almost never threatened, are never challenged by any Justice
Department, Democrat or Republican.
The horizontal mergers, when competitors merge, that tends to be when the government gets involved. So the fact that this was a Republican
administration challenging a vertical merger suggested perhaps that some other motives were in play other than simply a neutral application of
antitrust law.
TAPPER: I want to bring in Timothy Wu right now. He's a professor at Columbia Law School. Timothy, what's your take on the ruling?
TIMOTHY WU, PROFESSOR, COLUMBIA LAW SCHOOL: Yes, I mean, I haven't read it like everyone else, but my suspicion is that it may go so far and the
Justice Department will want to -- want to appeal this.
You know, they -- a lot of people in the antitrust law have been wanting to bring back scrutiny of vertical mergers, the idea that the government loses
this case totally seems strong. They did present a lot of evidence, so I wouldn't be surprised if Justice does seek the appeal as a -- even despite
the district court judge telling them not to.
TAPPER: And what would be the effect of that? Will that have the effect of freezing the merger, ending the merger, just the act of appealing?
WU: It totally depends on what appellate court does, they may not think it's enough an emergency to stay the merger, they may stay the merger.
Even if the merger is stayed, it doesn't necessarily mean the merger have to be abandoned.
But I think it's possible, but because the government thinks these principles are important enough, that they'll really want to appeal this.
TAPPER: Do you think the judge made the wrong decision today?
WU: Well, I haven't read the decision and I haven't seen it as much as they happen to see that. It sounds like he's gone pretty far, it sounds
like he's stuck to sort of the 1980s, more kind of a Burke(ph) line on Chicago line on antitrust, no, we never do anything and I think the law has
evolved since then and economic research has evolved, so this decision may be vulnerable to appeal for those reasons.
TAPPER: We only have about 30 seconds left, but as quickly as you can, I recognize you could probably speak for six hours on it, why would such a
merger be a bad idea.
WU: You know, it's just basically the idea that vertical mergers also cost consumers money, also interfere with competition, and you know, there's
ruling, again, I haven't read it. But it sounds like the old 1980s, Reagan's style, nothing vertical is ever a suspect.
This was a very big vertical merger, and if it's gone too far, the opinion may be very susceptible to an appeal.
TAPPER: All right, professor, thank you so much for your time --
WU: Sure --
TAPPER: I appreciate it. That's it for "THE LEAD" today. I turn you over to Wolf Blitzer. He is in "THE SITUATION ROOM." Thanks for watching.
END
