FCC Announces Details of Payola Settlement

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The Federal Communications Commission announces the details of a settlement with four of the nation's largest radio broadcasters — Clear Channel, CBS Radio, Citadel and Entercom — over the practice of payola, the practice of accepting payment from record labels to air their artists without disclosing that arrangement to listeners.

The settlement includes voluntary payments by the broadcasters; agreements to establish staff positions charged with overseeing compliance with the settlement; and the establishment of a database that tracks all money and other contributions from labels.

Under a separate agreement, the broadcasters have also volunteered to collectively air 4,200 hours per year of music by local and independent musicians.

FCC Commissioner Jonathan Adelstein pursued the case at the commission after it received reams of incriminating documents two years ago from then New York attorney general Elliot Spitzer. Spitzer discovered e-mails and other evidence of rampant payola across the record and radio industries in an investigation; he has previously settled with the record companies based in New York.

The FCC will also require hotlines for whistle-blowing employees. But the settlement absolves broadcasters of past payola misdeeds. Some critics worry that it lacks enforcement teeth.

The agreement was negotiated over months by the FCC and broadcasters to avoid lengthy litigation.



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