FCC Announces Radio Payola Deal

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April 13, 2007 3:08 PM

The FCC announced today that four giant radio broadcasters have agreed to settle an investigation into charges they took "payola" from major record labels.

The radio companies -- CBS, Citadel, Clear Channel and Entercom --  will pay a combined $12.5 million into the U.S. Treasury and promise to implement detailed "compliance plans," including the training of staff on the illegality of offering goods and services in exchange for airplay.

The companies also have agreed to help independent musicians by playing more than 4,000 hours of local and indie music.   

"Who knows, if this works well a listener driving coast-to-coast might actually hear some good local and regional music along the way instead of the same 20 songs," FCC Commissioner Michael Copps wrote in a statement released today.

His fellow Democrat, Commissioner Jonathan Adelstein, agreed, "Nearly every American music genre began with local artists getting played on local radio shows.  Motown, grunge, Elvis and rock 'n' roll, hip hop, country, bluegrass, and the Nashville sound began as local music being promoted by local, independent musicians and labels on local radio.  While each began in a different region of the United States, they all succeeded because they started getting heard on local radio and then broke out nationally and internationally."

The FCC settlement follows settlements by four major record labels -- EMI Music, Warner Music Group, Sony-BMG and Universal Music Group -- and two radio conglomerates -- Entercom and CBS Radio -- in a second payola investigation by the New York Attorney General's Office headed at the time by then-Attorney General Eliot Spitzer, who is now the governor of the state. 

Click Here for Full Blotter Coverage.

Chief Investigative Correspondent Brian Ross first reported on the allegations and investigation by then-Attorney General Spitzer's office on ABC News' Primetime.

Read the FCC's complete statement.