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@RIAA Opposition to Big Radio Payola Waiver Petition at @FCC

April 14, 2015

David Lowery called attention to Big Radio’s attempt to get around the payola statutes (“FCC Payola Lanes: Big Broadcasters Ask FCC for Payola Waiver“) and highlighted the need for public commentary on the application to the FCC by Clear Channel  & Co. to get a legal waiver of the payola laws.  As David wrote:

Paying for airplay is not actually illegal.  As long as a radio station announces to its audience that the track you are about to play (or just played) is”sponsored” and who has “sponsored” it, no penalty.

Although this requirement is weak,  it has largely ended (blatant) payola**.  Having to announce this puts label, artist and radio station in awkward and unflattering position.

So big broadcasters are asking for a waiver that would change the way this rule works.  They propose phasing out this requirement in two steps.  First they want to lump all the “we accepted payola” announcements into a single announcement broadcast 3 times a day.  The idea here is you wouldn’t really know you were listening to a payola song. Even if you heard the announcement you wouldn’t necessarily be able to put the sponsorship with the song.

The broadcasters helpfully provide an example announcement:

“Some of the music [and/or] sports programming that you hear on this station is sponsored [or paid for] by Interscope, Sony, Universal Records, or the Washington Nationals. For additional information, please visit our website at http://www.WXYZ.com or contact the station at 12345 Main Street, Washington, DC 20036, info@wxyz.com, or 202-555-1234.”

The public comments opposing this payola waiver are starting to come in.  Here’s the RIAA’s opposition filing which in part cites to the same language that David found particularly ridiculous:

Note that the example “once a day” notice proposed by the broadcasters states: “Some of the music [and/or] sports programming that you hear on this station is sponsored by [or paid for] by Interscope, Sony, Universal Records, or the Washington Nationals. For additional information, please visit our website at http://www.wxyz.com or contact the station at . . . .” This does not tell the public (i) what specific programming was paid for, (ii) who paid for what programming, and (iii) when such programming aired. It also leaves to chance whether the user that heard the sponsored material would ever hear the vague announcement about that programming if it airs much later that day.

Because the proposal is highly likely to cause less, not more, of the public to know about otherwise invisible sponsorships, it would undermine the entire intent of the law. Allowing a small segment of the public to learn once a day only that a broadcaster received some promotional consideration from someone for some programming played that day does nothing to further transparency or increase the amount of useful information received by the public. Contrary to the broadcasters’ statements, this proposal is not in the public interest.

Moreover, permitting broadcasters to create roadblocks to effective transparency may give them greater incentive to unfairly demand free labor from artists to promote the radio station and/or to unfairly demand payment from record labels to have particular music played on the station. This unfairness has been well documented. The proposed waiver would help broadcasters hide such unfair practices by shining less light on when they receive compensation. It would also help them create further market distortions that benefit themselves. Having effective rules that make such behavior transparent to the public helps guard against such abuse of market power.

Given the broadcasters’ reaction to fair pay for radio play, Big Radio’s yearning for free labor requires no introduction.  There will undoubtedly be more opposition filings, but this one highlights some important facts.

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