**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

*Re: CBS Radio, Inc.*, File No. EB-06-IH-1109, Order

*Re:* *Citadel Broadcasting Corporation*, File No. EB-06-1H-1108, Order

*Re:* *Clear Channel Communications, Inc.*, File Nos. EB-05-IH-0059 and
EB-05-IH-0144, Order

*Re:* *Entercom Communications Corp.*, File No. EB-05-IH-0033, Order

Today, a unified Commission sends a resounding message to the radio
industry: payola, in any form, has no place in radio and will not be
tolerated by the FCC. Payola deprives the listening public of the
country's freshest music, denies local and independent artists a fair
chance to get heard over the public airwaves, and saps the vitality of
radio. In short, payola hurts musicians, the radio industry and the free
flow of creative talent because music is chosen on the basis of who can
pay the most -- not who sounds the best.

This agreement is a breakthrough and a milestone in the long fight
against payola in this country. It ends an era of laissez faire
pay-for-play and signals that the cops are back on the beat to enforce
the law.

The Consent Decrees and the private agreements between the broadcasters
and the independent music community, particularly the American
Association of Independent Music (A2IM) and Peter Gordon, represent the
culmination of a series of lengthy negotiations among people who care
deeply about the future of radio and the music industry. I personally
appreciate the efforts made by the four companies which negotiated the
Consent Decree with me in good-faith and displayed a genuine willingness
to strengthen their relationships with local, unsigned and independent
musicians. Each company's commitment to showcase the talent of local and
independent artists for more than 4,000 hours indicates dedication to
localism, music diversity, and the public interest.

I am also thankful for the patience and support of my colleagues,
specifically Chairman Martin for his leadership in initiating the
investigation and securing significant monetary contributions,
Commissioner Copps for sharing my insistence on meaningful oversight and
business reform measures, and Commissioners Tate and McDowell for their
interest in this issue.

Today's historic settlement with four major broadcasters -- CBS,
Citadel, Clear Channel and Entercom \-- is the first of several steps
that the Commission will take to address the allegations of rampant
violations of our sponsorship identification laws, specifically
pay-for-play practices in the radio industry. I strongly encourage other
broadcasters who are implicated or subject to license renewal holds for
alleged sponsorship identification violations to enter into similar
agreements with the Commission and the independent music community.
Today's agreement is just the first wave of this investigation -- more
waves are coming.

Since 1927, before the FCC was even created, Congress has maintained an
unwavering requirement that broadcasters must announce who gives them
valuable consideration to air anything. The federal sponsorship
identification laws impose an unequivocal, legal obligation -- up and
down the chain of production and distribution -- to disclose all forms
of consideration. These rules are based on the basic principle that
listeners and viewers are entitled to know who is seeking to persuade
them so they can make up their own minds about the content.

For years, I have been hearing from local and independent artists in
different parts of the country that they could not get airplay on their
local stations. And listeners have complained that that commercial radio
sounded more and more homogenized and generic. As a huge fan of music
and radio, I could not help notice that commercial radio -- which was
once a unifying force in local communities -- had become increasingly
like a coast-to-coast public address system, often devoid of soul,
vitality, and local favor.

Nearly every American music genre began with local artists getting
played on local radio shows. Motown, grunge, Elvis and rock n' roll, hip
hop, country, bluegrass, and the Nashville sound began as local music
being promoted by local, independent musicians and labels on local
radio. While each began in a different region of the United States, they
all succeeded because they started getting heard on local radio and then
broke out nationally and internationally. That path to success, and
musical innovation, is hindered by payola since local artists without
major financial backing get crowded out. American radio listeners are
the first to suffer, but music lovers nationwide, and indeed all around
the world, are deprived of new sounds when radio playlists become
generic. Homogenization is good for milk, but bad for radio.

Despite many allegations about widespread payola practices, the FCC had
never investigated those claims, nor had we ever received credible
evidence until then-Attorney General of New York State, Eliot Spitzer,
launched a widespread investigation. He uncovered an arsenal of smoking
guns, involving hundreds of radio stations -- FCC licensees \-- and the
four major record labels. He aggressively pursued the problem and found
vast numbers of potential violations of federal law.

At my urging, the FCC launched a similar investigation and decided to
focus first on the corporate practices of four large radio station
groups -- Clear Channel, CBS, Citadel and Entercom -- concerning
potential payola violations. The results of these investigations have
enabled us to create a template for addressing other pending allegations
and payola violations in the future.

While this settlement is not a panacea to all payola woes, it requires
the implementation of certain meaningful reform measures that should
change corporate practices and behavior. The companies commit to
enforcing high standards with respect to the sponsorship identification
laws to avoid violations and the appearance of impropriety in the
process of music selection. Specifically, the companies commit to
implement numerous safeguards, including commitments to:

-   maintain a database containing a record to identify all items from
    record labels that exceed 25 dollars;

-   maintain a company hotline for employees to call the Compliance
    Officer to obtain advice and report violations;

-   appoint a Corporate-level Compliance Officer who is responsible to
    ensure compliance with the Consent Order, and all sponsorship
    identification laws;

-   designate a Compliance Contact for each market; and

-   conduct annual training for all programming personnel and
    supervisors

The corporate culture of radio should not encourage or promote the use
of the major record labels to subsidize the operating costs of radio
stations. That is why the Consent Decree limits the numbers of
electronic copies of songs and concert tickets, and the permissible
value of personal gifts, meal and entertainment, and travel and lodging
expenses. Some dishonest employees may continue to take money "under the
table." While you can outlaw theft, that doesn't mean stealing will
stop. The good news is that station owners are agreeing to send a clear
message that such practice will not be tolerated by first eliminating
some of the more blatant and abusive practices in the industry.

I believe that these compliance and business reform measures, which are
consistent with the reform measures developed by the New York State
Attorney General's office, will change behavior in certain respects.
Sunshine is truly the best disinfectant. There is a compelling need for
greater and more effective governmental oversight. The FCC should play a
role in ensuring the industry has sufficient safeguards in place. In
that regard, the companies are required to submit annual compliance
reports to the Commission. Additionally and, perhaps, more important,
the Consent Decree provides the Commission with the unequivocal
authority to gain access to the databases upon request.

I applaud the voluntary efforts of the broadcasters and the independent
music community to develop a meaningful way to build and protect a
healthy future for radio. With these efforts, more new music should
surface on the airwaves, and our country\'s rich cultural diversity can
continue to flourish and enrich the lives of everyone. I believe the
good faith platform these reforms were built upon are sturdy and will
develop over time, but the ultimate success of this initiative depends
on the cooperation of a great number of people. This is a
work-in-progress and will take considerable effort to fully realize. So,
even as we take this critical step, I stand ready to help, whenever
necessary, to ensure its ultimate success.