FCC Levies $12.5 Million in Fines at Four Largest Radio Station Groups

The Federal Communications Commission (FCC), and the four biggest radio broadcast companies - Clear Channel, CBS Radio, Citadel Broadcasting, and Entercom Communications - have come to a settlement in the FCC's longtime probe into what is known as "payola." Also known as "pay for play," payola is when large record companies pay or bribe radio stations in order to guarantee that a song or artist receives airtime.

The practice of payola came to the forefront of public consciousness in the 1950s, but the original practice of giving cash to DJs has changed so that it is now common for independent promoters - middlemen between the record labels and radio stations, in reality - to provide luxurious gifts. As part of the announced agreement, radio stations will be subject to close scrutiny, and will be limited on what gifts they can accept.

The announced settlement, which has not been fully agreed to by all parties involved, would involve the largest fines ever levied by the FCC. Under the settlement, which was reported on Monday and confirmed today by Jonathan Adelstein of the FCC, Entercom Communications has agreed to pay $4 million fines, Clear Channel Communications will pay $3.5 million, CBS Radio will pay $3 million, and Citadel Broadcasting will pay $2 million. Said Adelstein: "This is the largest collective fine in the history of American broadcasting. It wipes payola off the radio dial," he continued, which will give lesser-known musicians from smaller labels the opportunity to expand their audience.

As part of the settlement, the four radio conglomerates agreed to free a total of 8,400 hours, set aside to play music from independent record labels. In this setting, an independent label is one not owned by one of the nation's four largest music labels - Sony BMG, Warner Music Group, Universal Music Group, and EMI Group.

Adelstein stressed the importance of the guaranteed air time as a momentous breakthrough. "The public is fed up with hearing the same songs over and over," he said. "This should really lead to fresher sounds on the radio. Homogenization is good for milk but not radio."