FCC steps up probe of possible radio bribes

[dragons5]

from: http://www.radiorevolt.com/news.php?extend.372
WASHINGTON (Reuters) - U.S. regulators have intensified their probe into four big radio station chains for possible violations of rules that bar secret payments being made in exchange for airplay of music, officials said on Thursday.

The Federal Communications Commission sent letters of inquiry to Clear Channel Communications Inc., CBS Corp., Citadel Broadcasting Corp. and Entercom Communications Corp., two FCC officials said, speaking on the condition of anonymity.

Settlement talks between the FCC and the four companies stalled over possible financial penalties and the information the FCC had already collected in its probe, sources familiar with the matter said last month.

Some of the radio companies had offered to pay roughly $1 million each to resolve the FCC's preliminary inquiry into the practice known as "payola," they had said.

The FCC obtained some of its information from New York Attorney General Eliot Spitzer, who also has been investigating possible radio bribery. Compensation could be in the form of money, gifts like clothing or other items with value.

"We're still in contact with the companies and still will be," one FCC official said. "We need more information from the companies in order for the investigation process to go forward."

The FCC said in August it began a probe into whether stations violated rules that require disclosure of payments from music labels or record producers for airing songs. Republican FCC Chairman Kevin Martin has said the agency had been in contact with many of the companies.

"The commission takes any violations of the Communications Act seriously," said FCC spokesman David Fiske. "The chairman some time ago directed that there be active and ongoing investigations into alleged payola violations."

Representatives for CBS, Citadel and Entercom declined to comment. A Clear Channel representative was not available for comment.

FCC Commissioner Jonathan Adelstein, a Democrat who has pushed for investigations into undisclosed payments for radio airplay, said the letters are a sign the agency was committed to enforce the law.

"I am pleased that we have launched this formal phase of the payola investigation," he said in a statement. "Our investigation will be a thorough and complete review of the industry's alleged payola practices."

Payola, a combination of the words "pay" and "Victrola," from the old record player, is illegal under a number of U.S. laws.

Clear Channel shares closed down 13 cents to $27.98 while CBS shares fell 9 cents to $24.51 on the New York Stock Exchange. Entercom stock moved 9 cents higher to $26.68 while Citadel shares fell 25 cents to $10 on the NYSE.

[dragons5]

I have always hated the conglomerate media companies, now they are getting their just desserts. A point of clarification: CBS is owned by Viacom, the same company that owns MTV, MTVi, BET, VH1, Niceklodean, Comedy Central, SPIKE, Infinity Broadcasting, Viacom Outdoors, Simon & Shuster, CBS News & Sports and some country music video channel (either GAC or CMT).