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Specializing in Communications Law

The FCC's Payola Rules

Federal law, including Federal Communications Commission (FCC) rules, requires that employees of broadcast stations, program producers, program suppliers and others who have accepted or agreed to receive payments, services, or other valuable consideration for airing material must disclose this fact to the broadcast licensee airing the material. This is required so that broadcasters have the information they need to disclose to their audiences that the material was paid for.

What the Rules Say

The Communications Act and the FCC’s rules require the following:

When a broadcast licensee has received or been promised payment for the airing of program material, then, at the time of the airing, the station must disclose that fact and identify who paid for or promised to pay for the material. All sponsored material must be explicitly identified at the time of broadcast as paid for and by whom, except when it is clear that the mention of a product or service constitutes sponsorship identification.

Any broadcast station employee who has accepted or agreed to accept payment for the airing of program material, or the person making or promising to make the payment, must disclose this information to the station prior to the airing of the program.

Any person involved in the production or preparation of a program who receives or agrees to receive payment for the airing of program material must disclose this information. Broadcast licensees must make reasonable efforts to obtain from their employees and others they deal with for program material the information necessary to make the required sponsorship identification announcements.

The information must be provided up the chain of production and distribution before the time of broadcast, so the station can air the required disclosure.

These rules apply to all kinds of program material aired over radio and television stations. Some may also apply to cablecasts.

Alleged violations are reported to the FCC’s Enforcement Bureau and stations could be subject to investigation based on the allegations made. If a station is found to have violated the rules, it could face a fine from the FCC.

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