Univision’s FCC Payola Settlement May Not Portend More Now

There seem to be fewer pay-for-play deals, in which music labels or their representatives -- often independent promoters working on contract -- agree in secret to compensate radio stations or their employees for playing certain songs, industry lawyers said. They said major radio broadcasters, which settled earlier payola cases, and big labels aren’t using such independent promoters. The scare value of earlier settlements, including a $12.5 million deal with four major radio broadcasters in 2007, appear to have cut down on payola, radio lawyers said. Another factor behind the prediction that the FCC won’t be enmeshed in other high-dollar cases is that Chairman Julius Genachowski is focused on broadband, spectrum and issues unrelated to payola.

"Since the early days of radio, many broadcasters have taken steps to ensure that their listeners are properly informed,” bureau Chief Michele Ellison wrote in a blog post Tuesday. “Our coordinated enforcement actions make clear that we will not hesitate to act when they fail to do so. While this settlement was about protecting the public trust in our Nation’s airwaves, we will continue to bring the same vigor to protecting consumers across all communications services.” A bureau spokesman declined to comment for this article.

Some radio stations which got bureau letters of inquiry in 2008 (CD Oct 29/08 p7) that were part of the probe that also covered Univision haven’t recently heard from the bureau, said broadcast lawyer Frank Montero of Fletcher Heald, representing some of the Spanish-language stations. The bureau doesn’t appear to have issued follow-up requests for information, he said. “We don’t know if they're continuing to pursue other stations on this or if they're just going to let the matter drop, having reached a settlement with the Univision inquiries,” he said. “This is probably from Univision’s point of view just a cost of doing business. They don’t want to have this thing lingering there,” which Montero and other lawyers said could hold up license renewals.

With Jonathan Adelstein, who as a commissioner pushed for FCC payola investigations, no longer at the agency, Commissioner Michael Copps would seem to be the only current member of the agency keenly interested in the issue, Montero and others agreed. “With the possible exception of Copps, I don’t see this commission focusing that much time on broadcast-related issues,” Montero said. “This is kind of something they inherited. I don’t know that this is something that necessarily reflects a new and revived focus on payola issues say the way that Adelstein had focused on them.” In 2007 and partly prompted by Adelstein and Copps, the regulator settled probes for a total of $12.5 million with Citadel, Clear Channel, CBS Radio and Entercom (CD April 16/07 p1).

"That scared the shit out of everybody,” lawyer John Garziglia of Womble Carlyle, with radio-station clients, said of that deal. “The people I was working with just immediately backed off on that sort of stuff” such as working with independent music promoters, he said. Payola settlements “have the effect of doing that, and if those who didn’t get the message then get the message now, then all the better,” he said. “This gives guidelines to broadcasters. That’s one of the good things of this decision.”

"Payola is a dead issue” now at the FCC, said Prof. Chris Sterling of George Washington University, a former eighth-floor aide who teaches about the commission. “Radio is such a low priority at the commission. This is yesterday’s concern, with more central issues crowding the docket,” like broadband and spectrum, Sterling said. “I don’t doubt for a minute that it’s still happening. There are so many different ways it can operate across so many stations that unless somebody squeals, folks get away with it.”