Outcome of FCC’s Payola Inquiries Remains Unknown

So far, we have not seen public information about iHeart’s response to the FCC Chairman’s letter expressing concerns over payola compliance actions related to their upcoming country festival station event in Austin, Texas.  An Enforcement Bureau Advisory issued before the letter raised concerns that if stations were determining airplay based on artist participation in station promotions or events for reduced or no pay, and not disclosing those arrangements on air, a payola violation might result.

Until the industry can understand those responses, or the FCC takes some action, stations should take prudent steps to review and ensure their payola policies are in place and being followed.

As a reminder, payola is the unreported payment to—or acceptance by—employees of broadcast stations, program producers, or program suppliers of any money, service, or valuable consideration to achieve airplay for any programming. Section 507 of the Communications Act requires those persons who have paid, accepted, or agreed to pay or accept such payments to report that fact to the station licensee before the involved matter is broadcast. In turn, Section 317 of the Act (and the FCC’s Sponsorship Identification rule 73.1212) requires the licensee to announce that the matter contained in the program is paid for, and to disclose the identity of the person furnishing the money or other valuable consideration.