• by Erik Sass  @eriksass1, April 16, 2007

Four of America's biggest radio broadcasters agreed to pay $12.5 million in fines to close a two-year payola investigation and possible lawsuit by the federal government, the Federal Communications Commission announced last Friday. Clear Channel, CBS Radio, Entercom Communications and Citadel Broadcasting also agreed to prevent employees from accepting payments to play songs in the future.

To settle the case, the radio owners agreed to appoint special personnel, called "compliance officers," at their largest stations, as well as establish a database that records gifts in excess of $25. The owners also agreed to play a certain proportion of music by artists from independent record labels. Kevin Martin, the chairman of the FCC, remarked that "the Commission will not tolerate non-compliance with its rules," which forbids the payment of bribes to DJs or station managers in return for radio airtime for songs.

The origins of the case lie in the successful action at the state level by Eliot Spitzer, then the attorney general of New York State, in 2005. Without going to trial, Spitzer forced Sony BMG Music Entertainment to pay $20 million in fines for nearly identical payola schemes.

In settling the most recent case, Commissioner Michael Copps explained: "Pay-for-play broadcasting cheats consumers, musicians and the law. It denies consumers choice in what they hear, it deprives musicians of the exposure they need to survive, and it is illegal."