by Matthew Lasar Apr 20 2006 - 12:00am Miscellaneous
FCC Commissioner Jonathan Adelstein announced today that the agency had entered into the "formal phase" of a payola investigation of four media companies: Clear Channel Communications, CBS Radio, Entercom Communications, and Citadel Broadcasting.
"This should put to rest any question about the FCC's commitment to enforce the law," Adelstein said. "Our investigation will be a thorough and complete review of the industry's alleged payola practices."
Adelstein said that the FCC had sent letters of inquiry to the four companies regarding the problem. The move follows a reported breakdown in negotiations. Reuters news service, citing anonymous sources, reports that the talks stalled over possible fines and the amount of information the FCC wants the companies to disclose.
FCC rules say that broadcasters can accept money or gifts for playing certain songs, but they have to disclose the payment at the time of airing and acknowledge who paid for the music. Last month New York Attorney General Elliot Spitzer criticized the FCC for not moving more aggressively on the issue.
"The agency's inaction is especially disappointing given the pervasive nature of this problem and its corrosive impact on the entertainment industry," Spitzer declared in a March 8th press statement.
Spitzer has already sued one of the four companies, Entercom, which owns and operates 105 radio stations on the east coast. The suit charges that Entercom stations solicited payments from record companies for air time, and traded air time for gifts, promotional items, and personal trips.
