FCC Opens Radio Probe

With negotiations stalled with four major radio chains, the Federal Communications Commission has followed in New York Attorney General Eliot Spitzer’s footsteps with its own investigation into alleged pay-for-play practices.

Two FCC officials confirmed the probe of Clear Channel Communications, CBS Radio (formerly Infinity), Entercom Communications and Citadel Broadcasting, according to the Los Angeles Times.

All four companies reportedly received “letters of inquiry” from the FCC seeking information on possible gifts, money or other compensation their employees may have received for playing certain songs.

Letters of inquiry are the first steps in FCC investigations that can result in sanctions ranging from monetary penalties to station license revocations.

The investigation is considered the largest of its kind since the payola scandals of the early 1960s.

In recent weeks, Spitzer complained bitterly about the FCC negotiating settlements with radio networks, accusing the commission of undermining his own efforts and offering fines that amount to wrist slaps to the conglomerates. Reports had indicated, for example, that Clear Channel was mulling over a $1 million fine after having offered to pay $500,000.

“We were in the process of trying to reach settlements, but when talks were inconclusive, we decided we needed more information,” said an FCC official who spoke to the Times on the condition of anonymity because the investigation was ongoing. “We will continue to speak with the parties and to hold those who have violated commission rules accountable.”

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

Federal regs require that radio listeners be informed any time there is an exchange of items of value for airplay of specific songs.