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Thinkpad (AXcess News) Washington - New York Attorney General Eliot Spitzer filed a lawsuit against Entercom Communications (NYSE: ETM) alleging the owner of radio stations violated the Payola Rule in accepting kick-backs and bribes from record companies.
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Microsoft Spitzer told AP, "We have moved from the label side, those who put out the records and are forced to pay for air time, and switched to the radio conglomerates that are extracting money."
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Laptop Computers Entercom is one of the5th largestradio chain in the nation,operating 105 radio stations coast to coast.
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Laptop Computer The payola rule is a federal violation of radio stations licenses and New York state civil law. It means that radio stations cannot play music that they're paid to push, regardless of whether that payment is in the form of cash orgifts.
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Desktop Computer Spitzer was quoted as saying that the Federal Communications Commission should consider revoking Entercom's license for its payola violations. He accused the FCC of being "asleep at the switch." The Justice Department has begun its own investigation of payola violations of the online music industry in a seperate probe, an area where New York's attorney general has yet to go.
Notebooks Spitzer claims air time was sold for $1,000 or more for individual songs. He said the practice included providing a $2,500 laptop computer for a country station in exchange for playing artists Joe Nichols and the duo McHayes, the lawsuit claims.
Lenovo "The decisions are being made as to what to put on the airwaves based on bribes to be paid and extracted, rather than on judgments based on artistic merit," said Spitzer.
Hard Drive Entercom spokesman Adam Miller said insisted that the company plays by all the rules.
Travelstar "We have cooperated fully with the attorney general's office in this investigation. Now that the attorney general has filed this civil action, we are confident that the issues will be fully and fairly resolved by the court," said Miller.
Shares of Entercom closed down 26 cents at $28.50 Wednesday.
