The FCC is increasing its focus on payola in response to a letter received from Republican Senator Marsha Blackburn of Tennessee. (i.e., Nashville). She is concerned that radio stations and networks are circumventing the FCC’s payola rules by offering “more airtime for an artist’s songs if the artist performs a free show.”
The FCC responded immediately by issuing an Enforcement Advisory. The FCC’s Public Notice makes it explicitly clear that stations cannot compel musicians to play live at a lower price in return for more airplay.
"[N]either broadcast licensees nor their personnel can compel or accept unreported free or unreported reduced fee performances by musicians in exchange for more favorable airplay."
Remember, accepting money or anything of value for airplay without disclosure violates federal law governing payola. According to the Commission:
"Payola is the unreported payment to—or acceptance by—employees of broadcast stations, program producers, or program suppliers of any money, service, or valuable consideration to achieve airplay for any programming. Section 507 of the Act requires those persons who have paid, accepted, or agreed to pay or accept such payments to report that fact to the station licensee before the involved matter is broadcast."
Under §317 of the Communications Act, stations are required to announce on the air that the song or content has been sponsored and disclose who paid. Failure to do so can result in fines and possibly criminal penalties.
Stations have an obligation to use reasonable diligence to obtain information from their employees. However, the “reasonable diligence” standard can require a higher duty of care by stations whose formats or other circumstances make them more susceptible to payola.
You can see the Enforcement Bureau's new payola advisory here.
You can see Senator Blackburn’s letter here.