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FCC Steps Up Payola Probe

The Federal Communications Commission is stepping up its investigation into alleged payola practices at four of the nation's largest radio corporations after attempts to reach a settlement stalled.

An FCC official with direct knowledge of the investigation confirmed the agency had requested documents this week from Clear Channel Communications Inc. (CCU), CBS Radio Inc. (CBS), Entercom Communications Corp. (ETM) and Citadel Broadcasting Corp (CDL).

The agency wants to learn more about accusations that radio programmers received gifts, cash and other items in exchange for playing certain songs at radio stations without publicly disclosing the deals.

The FCC requests, known formally as "letters of inquiry," are the next step in investigations that could result in sanctions ranging from financial penalties to the revocation of stations' licenses.

"The commission takes seriously any alleged violations," FCC spokesman David Fiske said. "Chairman Martin directed the enforcement bureau to conduct an active and ongoing investigation a number of months ago."

The four companies have been negotiating with the FCC for weeks but the talks stalled last month over how much the broadcasters should pay, said the FCC official, who spoke on condition of anonymity because the investigation is ongoing.

Radio executives have said that company policies prohibit accepting gifts for airplay and that internal probes have not revealed widespread wrongdoing.

Federal regulations require that radio listeners be informed anytime there is an exchange of items of value for airplay of specific songs.

New York Attorney General Eliot Spitzer launched an investigation in 2004 into alleged wrongdoing by music and radio companies. Earlier this year, Spitzer sued Entercom Communications Corp., accusing its executives of running scams to trade cash for airplay of songs.

Entercom has denied the allegations.

The Los Angeles Times first reported the development in Thursday's editions.

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