Update: FCC, Radio Talks On Payola Hung Up On Key Issues
April 3, 2006 at 6:05 AM (PT)
As a followup to FRIDAY's (3/31) NET NEWS article quoting REUTERS "Report: Broadcasters In Talks With FCC To Settle Payola Investigation" two other articles have come out on the subject with additional information, including how talks are hung up on some very key issues to a settlement.
The NEW YORK TIMES' JEFF LEEDS article "Radio Industry Said To Seek Deal to Settle Payoff Accusations," and the L.A. TIMES' CHARLES DUHIGG's article "FCC, Radio Firms In Talks," both confirm the REUTERS' article but both note that the talks with CLEAR CHANNEL, CBS RADIO, ENTERCOM, and CITADEL are at a delicate stage and are hung up on how much money they would have to pay for alleged "pay for play violations", and the major issue of "what constitutes improper on-air promotion."
FCC Pushes For Stiff Fines
The L.A. TIMES story says, "Some of the radio companies have proposed fines of as much as $1 million. However, at least one FCC Commissioner, Democrat JONATHAN ADELSTEIN, is pushing for penalties that could exceed $10 million per company.
"Another disagreement centers on the FCC's contention that the practice of giving radio stations CDs, concert tickets and other goods in exchange for mentioning upcoming concerts and album releases, violates federal regulations unless the deals are disclosed on the air.
"But radio executives say such exchanges are standard within the industry, and that it would be burdensome to disclose them each time an artist is mentioned.
"'There's going to be a huge problem if every time a disc jockey mentions Madonna, they have to list everything the station has received from her record company,' said HARRY COLE, a communications attorney not involved in the negotiations.
"Federal regulations generally require broadcasters to tell listeners when promotions have been paid for so that they do not confuse advertisements with unpaid editorial content."
Failure To Settle Is Not A Pretty Option
What happens if the negotiations fail? According to the NEW YORK TIMES, "If the two sides do not come to an accord, the agency is expected to start a broad investigation into the payments and request internal documents and e-mail messages from the radio chains.
"The companies are trying to avoid the expense 'and potential embarrassment' that could arise from an investigation."