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FCC opens probe into radio payola

Queries about alleged payoffs at nation's four largest radio corporations
/ Source: The Associated Press

The Federal Communications Commission has opened an investigation into alleged payola practices at four of the nation’s largest radio corporations after settlement talks stalled, it was reported Thursday.

Two FCC officials with direct knowledge of the investigation confirmed that the agency had requested documents from Clear Channel Communications Inc., CBS Radio Inc., Entercom Communications Corp. and Citadel Broadcasting Corp., according to the Los Angeles Times.

The agency wants to learn more about accusations that radio programmers received gifts, cash and other items in exchange for playing certain songs at radio stations without publicly disclosing the deals.

The FCC requests, known formally as “letters of inquiry,” are the first step in investigations that could result in sanctions ranging from financial penalties to the revocation of stations’ licenses.

An FCC spokeswoman declined to comment for the newspaper report.

The four companies have been negotiating with the FCC for weeks but the talks stalled last month over how much the broadcasters should pay, the Times reported.

“We were in the process of trying to reach settlements, but when talks were inconclusive, we decided we needed more information,” said an FCC official who spoke to the Times on the condition of anonymity because the investigation was ongoing. “We will continue to speak with the parties and to hold those who have violated commission rules accountable.”

Radio executives have said that company policies prohibit accepting gifts for airplay and that internal probes have not revealed widespread wrongdoing.

Federal regulations require that radio listeners be informed anytime there is an exchange of items of value for airplay of specific songs.

New York Attorney General Eliot Spitzer launched an investigation in 2004 into alleged wrongdoing by music and radio companies. Earlier this year, Spitzer sued Entercom Communications Corp., accusing its executives of running scams to trade cash for airplay of songs.

Entercom has denied the allegations.