FCC has hands full.
Nearly two months after New York state attorney general Eliot Spitzer unveiled a landmark $10 million settlement with Sony BMG, the Federal Communications Commission has yet to examine a motherlode of evidence collected in Spitzer's continuing payola investigation. The FCC has had its hands full with a host of post-Hurricane Katrina communications issues. And the Enforcement Bureau, which would take the lead in a federal payola investigation, has been dealing with a backlog of indecency complaints.
"We're keeping our powder dry before we try to blow the roof off," an FCC official, who requested anonymity, told Billboard Radio Monitor. "We're waiting for that opening when we can push for payola to be the next item that we intend to dedicate a certain amount of resources toward."
With two roomfuls of evidence to examine, the FCC will need to free up both resources and time. In addition to Sony BMG, Spitzer's 13-month investigation has subpoenaed the three other major label groups, along with roughly 7 broadcast groups and two independent promoters.
Shortly after the settlement, FCC commissioner Jonathan Adelstein referred to evidence unearthed by Spitzer's office as "an arsenal of smoking guns" and expressed eagerness for the FCC to ramp up its own investigation. Several days later, a more reserved sounding chairman Kevin Martin pledged to do just that.
However the commission has yet to meet with Spitzer to determine how to structure its own investigation. Since the New York state attorney general and the FCC deal with different statutes in different jurisdictions, independent but parallel investigations may make the most sense.
"It's a pretty wide investigation which requires some time to decide how we're going to structure [FCC involvement in] the investigation," the commission source said. "We expect everything to be on the table," the source said, not just materials uncovered in the Sony BMG settlement.
After reviewing the evidence in New York (and perhaps taking some of it back to Washington), the Enforcement Bureau would make recommendations to the commission. If it decided to proceed, the commission would then send Letters of Inquiry to any licensees it determined had violated the federal payola statute, which prohibits stations from accepting money, gifts or other valuable consideration in exchange for airplay without disclosing the arrangement on the air. The licensee would then have the opportunity to respond to the commission and provide additional documentation in its defense.