Airplay in Clear Channel settlement


WASHINGTON -- Clear Channel on Friday told the FCC it had reached a royalty-payment accord for independent labels and musicians seeking air time as part of an agreement that allowed the radio giant to settle payola charges.

In a letter sent to the commission, the company and the American Association of Independent Music and the Recording Artists' Coalition told the commissioners they had settled their differences over the language in the license that local musicians and independent labels can download to get airtime.

In May, the FCC approved $12.5 million in consent decrees that settled payola allegations against four of the nation's largest radio broadcasters.

While the deal closed the FCC's investigation in the pay-for-play practices of Clear Channel, CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp., the companies admitted no wrongdoing.

In a negotiated side deal, the broadcasters made an agreement reserving more than 4,000 hours of airtime to local and independent artists.

Questions by the A2IM, RAC and the Freedom of Music Coalition had been raised about whether the license Clear Channel originally used ceded too many artists rights to the company. The current agreement appears to settle those questions by allowing artists to waive the royalty if the recording is used as a promotional tool.

Clear Channel executive vp and chief legal officer Andy Levin defended the company, saying its first effort at writing the license was in good faith, and he bristled at suggestions that the company was going to renege on the deal.

"This is a perfect example of no good deed goes unpunished," he said. "We never had any intention of not paying licensing fees for radio airplay or for online streaming of simulcast programs. RAC and A2IM brought to our attention that the licensing agreement could have been construed otherwise, so we clarified it well before FMC filed its misleading and misinformed petition. FMC's allegations of a 'payola-like scheme' are irresponsible and totally false."

FMC called Levin's comments sour grapes, saying it was the organization's complaint to the FCC, and the interest of Sen. Russ. Feingold, D-Wisc., that got the company moving.

"Clearly, Levin is engaging in double-talk after his chain was caught engaging in a questionable practice," the organization said in a statement. "It's more static from Clear Channel."

But RAC national director Rebecca Greenberg credited Clear Channel for making a good-faith effort that bore fruit.

"We are incredibly grateful to A2IM for identifying the problem and working with them to resolve the issue in a professional and respectful manner with Clear Channel," she said. "Clear Channel immediately agreed to revise the online license in a way that guarantees payment of all statutory royalties to local, unsigned artists and independent labels, and also provides them with the choice of promotional opportunities for on-demand streaming and downloading."