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FCC to look into Sony BMG, radio station disclosure

August 9, 2005

WASHINGTON (Reuters) – U.S. communications regulators said
on Monday they will review whether Sony BMG Music Entertainment
and radio stations violated rules that require disclosure of
payments for airing songs.

Sony BMG, a joint venture of Sony Corp. and Bertelsmann AG,
last month paid $10 million to settle a New York state probe
into “pay for play” practices known as payola.

Federal Communications Commission Chairman Kevin Martin
directed his enforcement bureau staff to review the settlement
agreement for possible evidence of wrongdoing.

“If the bureau determines violations of the payola rules
have occurred, the Commission will take swift action,” Martin,
a Republican, said in a statement.

“In addition, if the bureau is presented with evidence of
payola rule violations outside of the Sony BMG Music
Entertainment settlement, it is to thoroughly investigate those
complaints as well,” he said.

A Sony BMG spokesman declined comment.

Democrat FCC Commissioner Jonathan Adelstein had pressed
the FCC to review the Sony settlement and New York Attorney
General Eliot Spitzer, also a Democrat, urged FCC action,
including potentially stripping stations’ broadcast licenses.

Spitzer has also been investigating other music companies
including Warner Music Group Corp. and radio companies
including Clear Channel Communications Inc., among others.

“The airwaves belong to the public, not the highest
bidder,” Adelstein said in a statement. “The vitality of radio
is sapped when music is selected based on bribes rather than
merit.”

Reuters/VNU




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