Slap on the Wrist Won’t Stop Payola

Industry Ears, Future of Music Coalition and Free Press call for FCC to impose strict conditions and stiff penalties on radio giants

WASHINGTON - January 24 - As the Federal Communications Commission prepares to settle with the broadcasters found violating payola rules, Industry Ears, Future of Music Coalition and Free Press expressed grave concern over the reportedly lenient terms of the consent decree. The groups are urging the FCC to hold broadcasters accountable for their massive payola abuses by setting strict conditions and imposing stiff penalties to end pay-for-play practices in the radio industry.

"The marriage of radio and records must end," said Paul Porter, co-founder of Industry Ears. "The FCC must include a third-party system to end payola. Industry Ears believes that a transparent research component must be included in any consent decree. Restoring localism to radio is a must. There should be no free pass issued to the hundreds of stations benefiting from pay for play."

Recent media reports indicate that radio conglomerates Clear Channel, Citadel, Entercom and CBS Radio — which were originally implicated in an investigation by then New York Attorney General Eliot Spitzer — would not be required to admit any wrongdoing in their deal with the FCC. Instead, the commission would merely require them to agree to a code of conduct, an education program, and a specific allotment of airtime for independent music.

"Ending rampant payola abuse requires more than a slap on the wrist," said Frannie Wellings, associate policy director at Free Press. "The FCC must ensure that the stations caught with illegal gifts in hand admit wrongdoing and pay stiff financial penalties. All stations must adhere to strict reporting requirements and third-party audits and open the airwaves to independent artists and local music."

This is an issue of national importance and the FCC should open the proposed settlement proceeding up to public notice and comment. At a minimum, Industry Ears, Future of Music Coalition and Free Press called for any payola settlement to include the following conditions:

· An admittance of wrongdoing by Clear Channel, Citadel, Entercom and CBS Radio.
· A five-year time span for the consent decree.
· Stiff financial penalties for current and future payola abuses.
· A strong plan for annual reporting to the FCC and third-party review of broadcast practices.
· Disclosure to the FCC of internal reports and records of transactions.
· FCC access to playlist information.
· Transparency, conformity to payola rules, and inclusion of local and independent music in music testing pools used by some stations.
· Requirements that new music testing include titles from major and independent record labels and artists that have met the required airplay criteria.
· Weekly airplay for independent artists for the full term of the consent decree, including all stations found involved in payola.
· Terms of this agreement made public via the Internet and on-air announcements.

"We are hopeful that the FCC will see this investigation as an historic opportunity to regulate commercial radio in a way that truly benefits the public," said Michael Bracy, policy director at Future of Music Coalition. "From our standpoint, any successful settlement must include a basic framework that outlines how the independent music community can interact with the commercial radio industry to gain access to commercial airplay; a credible oversight plan that ensures the negotiated framework can be enforced in a way that will lead to true reform; and serious penalties that hold the broadcast industry responsible for years of abusive practices that have so damaged the music community and the public. Any deal that does not address all three points must be judged a failure."