Talks stalled, FCC steps up probe of payola allegations

April 21, 2006|By BLOOMBERG NEWS

WASHINGTON -- The Federal Communications Commission has stepped up its investigation of allegations that four of the largest U.S. radio companies took money and gifts to play certain songs after settlement talks stalled.

The FCC, led by Chairman Kevin J. Martin, sent letters of inquiry yesterday to Clear Channel Communications Inc., CBS Radio Inc., Entercom Communications Corp. and Citadel Broadcasting Corp., Commissioner Jonathan S. Adelstein said.

The letters, which seek facts and documents, address allegations that radio programmers received undisclosed money and gifts from music companies. The FCC probe began in August after a $10 million settlement between New York Attorney General Eliot Spitzer and Sony BMG Music Entertainment, the world's second-largest music company. Some FCC commissioners want to fine the radio companies as much as $10 million.

Settlement talks between the FCC and the radio companies bogged down over the size of the fines and future disclosure of ties between stations and music companies.

"This should put to rest any question about the FCC's commitment to enforce the law," Adelstein, a Democrat who prodded Martin to open the investigation, said. "Our investigation will be a thorough and complete review of the industry's alleged payola practices."

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