- The Washington Times - Tuesday, March 6, 2007

Kill Rock Stars, Appleseed Recordings and Fatboy Records may be coming to a station near you.

Four major radio companies have agreed to set aside more than 4,000 hours of free airtime to independent record labels, representatives from the broadcasters and labels said yesterday.

In a separate deal, Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp. also reached a $12.5 million tentative settlement with the Federal Communications Commission, according to company and FCC officials.

The agreements, first reported yesterday by the Associated Press, are intended to deter what is commonly known as “payola” or “pay for play,” in which a radio station provides airtime to a record company in exchange for money or other goods.

Payola has been around for decades and was outlawed in 1960, when Congress passed a law making it punishable by a $10,000 fine and a year in prison. The term itself is a contraction of “pay” and Victrola, an early record player.

The monetary settlement with the FCC is part of a consent decree that has yet to be voted on by the full commission, sources said. It was reached at the same time broadcasters committed to providing 8,400 half-hour segments of airtime to small record labels and unsigned artists.

Broadcasters do not admit fault under the FCC deal, which calls for stricter oversight of their interactions with record labels. Some of the new requirements would include a limit on gifts from record companies; a special hot line for employees to report violations; and a fleet of compliance officers to monitor stations, which would list all items of value received from record companies in a database.

Of the four broadcasters involved, Clear Channel and CBS Radio own stations in the Washington area.

“While no violations were found, we are pleased to announce that Clear Channel has agreed to settle this long-standing payola investigation with the FCC,” said Andy Levin, Clear Channel’s chief legal officer. “Separately, the company is pleased to announce we are reaffirming our commitment to new and emerging artists by committing a significant amount of airtime to music performed by unsigned artists.”

Clear Channel owns several local stations, among them WIHT-FM (99.5) and WASH-FM (97.1). CBS Radio, whose roster includes WJFK-FM (106.7) and the new WTGB-FM (94.7), declined to comment.

“It’s one of those little miracles,” Peter Gordon, president of independent record label Thirsty Ear Recordings, said of the airtime deal. Mr. Gordon, who acted as a chief negotiator for the American Association of Independent Music, said the parties have yet to hammer out the details of implementation but noted, “We have an understanding in principle.”

In addition to airtime, broadcasters and the independent record companies agreed to new “rules of engagement” aimed at providing equal access to radio station programmers.

“Hopefully we’ll hear more dynamic music on the radio,” said FCC Commissioner Jonathan Adelstein, a Democrat who has led the charge against payola, which he said puts smaller labels with less money at a disadvantage. “Everybody wants to turn the page and put payola behind us.”

Many credit former New York Attorney General Eliot Spitzer, who is now the state’s governor, for exposing payola scandals. After opening an investigation three years ago, Mr. Spitzer reached settlements with the big four record labels — Sony BMG Music Entertainment, Warner Music Group, Universal Music Group and EMI Group — amounting to $30.1 million.

The FCC can regulate licensed radio stations but has no authority over record companies. Federal law allows radio stations to play songs in exchange for money as long as they disclose it.

During his tenure as attorney general, Mr. Spitzer also settled with Entercom and CBS Radio for a total of $6.25 million in agreements that are legally binding only in New York. Afterward, the FCC opened its own investigation.

Tom Taylor, editor of Inside Radio, warned that implementing the private agreement between labels and radio broadcasters “could be really sticky.”

“The devil is in the details,” said Mr. Taylor, a radio veteran. “People listen to songs because they like them. You can’t turn it into a hit if it’s not a hit.”

Sen. Russ Feingold, Wisconsin Democrat who has authored payola legislation, said he is withholding judgment on the decree until it is official. However, he said: “The apparent lack of acknowledgment of wrongdoing sends the wrong message. Whatever the final settlement says, it is clear that we need continued oversight both internally and by the FCC to make sure the changes in the industry’s practices are not just on paper.”

An FCC official said the agreement could be made public as early as this week.

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