FCC under payola pressure

Senator urges commish to clarify loopholes

WASHINGTON — A key lawmaker has pressed Federal Communications Commission chairman Kevin J. Martin for answers regarding the agency’s ongoing investigation into payola.

In a letter sent Wednesday to Martin, Sen. Russell D. Feingold (D-Wisc.) asked the chairman to address “a lack of clarity about the FCC’s jurisdiction, leading to uncertainty about whether loopholes exist in the federal law.”

Last year, New York state attorney general Eliot Spitzer reached a settlement with Sony BMG regarding allegations of pay-for-play activities. According to a statement from Feingold’s office, “Spitzer indicated there is evidence that radio station groups and their employees violated both state and federal law.”

After the settlement, Martin announced an agency investigation into whether federal laws were indeed broken.

Feingold asked for an update on any findings so far. Then, citing the “complicated web of questionable relationships between record labels, middlemen called independent promoters and radio station conglomerates that goes well beyond the (simple) bribery of DJs in the 1950s,” Feingold requested some definitive answers on whether the FCC is procedurally up to untangling the mess.

Some parties implicated in these relationships have claimed their activities are not subject to FCC regs.

“As far as I know, the FCC has not taken an official position on these contentions,” Feingold wrote. “What is the FCC’s interpretation of how the current rules apply to these practices? Would passing funds through a third party who claims to be only providing promotional advice or merchandise be considered payola? If the parties claimed the transaction was for another purpose — a consulting fee, for example — could the FCC punish the perpetrators under the current rules?

“I encourage you to broadly interpret the existing law and regulations and make a clear statement that this new payola is illegal as well,” Feingold continued.

He also questioned whether the agency is devoting enough resources to the problem. “Considering the complexity of these relationships, I would like to know how many investigators you have been able to assign exclusively to this investigation,” Feingold wrote.

“There seems to be some real questions about our policies, as well as some who claim a lack of clarity so they can skirt the rules,” said FCC commissioner Jonathan Adelstein in a statement. Adelstein, who has made exposing payola a priority, added: “We need to clarify our payola and sponsorship identification rules. Our authority to regulate broadcasting is very broad, so we need to be forthcoming in how we interpret and enforce the law to encourage compliance.”

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