ABC Report: FCC Probing Hundreds Of Stations For Payola
February 10, 2006 at 7:13 AM (PT)
ABC NEWS is reporting that hundreds of radio stations are being investigated for payola violations by the FCC, with Commissioner JONATHAN ADELSTEIN confirming that the probe is underway based on evidence uncovered in NEW YORK Attorney General ELIOT SPITZER's investigations into label business practices.
The heavily promoted reports by BRIAN ROSS were scheduled to air on THURSDAY's edition of "PRIMETIME LIVE" but were pre-empted in order to air a repeat showing of SUNDAY's "GREY'S ANATOMY." The "PRIMETIME LIVE" payola reports have been pushed back until next THURSDAY (2/16) at 10p (ET/PT).
This is potentially the most wide spread and flagrant violation of FCC rules in the history of American broadcasting.
ROSS' reports have been posted on ABCNEWS.COM in two segments, one interviewing SPITZER and another featuring a talk with ADELSTEIN. In "The Cloud Over the Grammys: Stars React To The New Investigation Into Paying For Play On The Radio," ROSS interviews several music industry notables and SPITZER about payola, and includes a video excerpt from the SPITZER interview, in which the following exchange takes place:
SPITZER: "There is no question in my mind that payola, which, unfortunately, has been part of the music industry for decades, has been orchestrated from the very top, because the executives understand that the use of payola has permitted them to select winners and losers, and to make more money on their own, and the losers have been the public and artists."
ROSS: "How widespread is this?"
SPITZER: "That's one of those questions that I can't answer with a number because obviously we see evidence of wrong-doing, but it’s hard to know whether we've seen all of it and how many people are not participating but we have settled already with two of the major labels, and the record is out there with respect to some of the evidence by no means not all of the evidence, but some of the evidence of impropriety. And with respect to the radio conglomerates, we are still gathering that evidence. Certainly with some of them the evidence is overwhelming that they participated knowingly, they orchestrated, and they manipulated a system in violation of the statutory scheme that is designed to prohibit this behavior."
ROSS: "Based on what you've found, are there some of these major radio broadcasting companies that you would say are unfit to hold licenses?"
SPITZER: "Well I don't want to go so far as to say they're licenses should be withdrawn. I will leave that decision to the FCC. But certainly the behavior has been unethical, improper, illegal, and a sanction of some severity clearly should be imposed."
Adelstein Calls For FCC "To Do Its Job"
In a separate report, "100's Of Radio Stations Cited In Payola Probe," FCC Commissioner JONATHAN ADELSTEIN tells ROSS that "the FCC staff is working with voluminous evidence right now. It's a complicated and wide-ranging investigation. This is potentially the most wide spread and flagrant violation of FCC rules in the history of American broadcasting. We've never seen evidence of such a systematic betrayal of the responsibility of broadcasters."
"I can't believe that radio stations are putting their licenses at risk," ADELSTEIN adds. "It seems to me they thought the FCC was asleep and they shot someone in front of the policemen. The policeman is obligated to act when evidence is so clear."
ADELSTEIN says that SPITZER "has shared mountains of information with the FCC ... that seem to clearly implicate some of the companies controlling much music radio in the UNITED STATES."
"There appears to be widespread and flagrant violation of FCC rules regarding payola, (including) undisclosed promotions by radio broadcasters," ADELSTEIN alleges. "And we need to find out who did it, basically prosecute any violations to the fullest extent of the law. When anything is aired that is paid for without being disclosed to the public it is a clear violation of FCC rules.
"We have a responsibility to get to the bottom of this. It's important that the FCC does its job and not let the states do it for us."
Addressing the question of what kind of sanctions the FCC might take, ADELSTEIN says that "at this stage in the investigation it's not clear what the appropriate sanctions are because we're still looking into it, seeing if there are violations and, if there are, if they are systemic and go to the corporate offices.
"While it's highly unusual for the FCC to pull licenses on first violation, depending on the severity that is one option that is available to us. These are criminal matters as well. If we do find evidence of criminal violations its incumbent on us to refer this to the DEPARTMENT OF JUSTICE for criminal prosecutions."