Several members of Congress on Thursday called for the federal government to investigate whether Clear Channel Communications Inc. and other radio broadcast giants are violating payola laws.
Their comments follow a report in The Times disclosing that a coalition of record companies and artist unions were preparing to call for the Federal Communications Commission to probe questionable promotion practices in the music industry, in which middlemen pay radio stations for the exclusive right to pitch songs on behalf of record labels.
"What's happening here is a process that the record labels once thought helped facilitate getting radio airplay has now become so coercive and expensive ... that they've finally decided to ... come forward publicly to expose a practice they participated in for a long time," said Rep. Howard L. Berman (D-Mission Hills).
There has been a federal payola statute for 40 years that prohibits radio stations from accepting money for playing songs without disclosing that information to listeners. The payola laws were enacted after a scandal that exposed rock deejays taking money from record labels to play certain songs.
Seeking to distance themselves from airplay transactions, record labels soon began hiring independent promoters to pitch their songs to radio. But for years, record executives have privately acknowledged the soaring cost of paying promoters in order to sidestep the payola law. These promotions now cost the record labels an estimated $150 million a year, sources said.
Since 1996, the radio industry has rapidly consolidated through a series of mergers. Clear Channel now controls about 1,225 radio stations, and its rival Infinity, owned by Viacom Inc., controls about 200 stations.
The Recording Industry Assn. of America and other music groups claim that the cost of getting a song played on the air continues to rise.
"The issues in this complaint raise critical 1st Amendment and communications law issues," said Rep. John Conyers Jr. (D-Mich.). "[We need] a full and complete airing of the matter so we can begin to resolve these allegations and protect the best interests of both creators and the listening public."
Sen. Russell D. Feingold (D-Wis.) said Thursday that he plans to introduce legislation to strengthen payola laws and other problems accelerated by deregulation in the broadcast industry.
"We need to close the loopholes in the existing laws," said Feingold, who also wants to set a cap on radio station ownership.
