[DeltAlum]

The following is from the Federal Communications Commission website, explaining the Communications Act of 1934 as amended by the Communications Act of 1996.

I could not get this to copy, so please excuse any typos.

"Section 317 of the Communications Act, as amended, requires broadcasters to disclose that matter has been broadcast in exchange for money, service or other valuable consideration. the announcement must be made when the subject matter is broadcast. The Commission has adopted a rule, which sets forth the broadcasters' responsibilities for sponsorship identification.

Section 507 of the Communications Act, as amended, requires that when anyone pays someone to include program matter in a brodcast, the fact of payment must be disclosed in advance of the broadcast to the station over which the matter is to be carried. Both the person making the payment and the recipient are obligated to disclose the payment so that the station may make the sponsorship identification announcement required by Section 317 of the Act. Failure to disclose such payments is commonly referred to as "payola" and is punishable by a fine of not more than $10,000 or imprisonment for not more than one year or both. These criminal penalties bring violations within the purview of the Department of Justice.

Thus, for example, if record companies or their agents pay broadcasters to play records on the air, those payments are legitimate if the required sponsorship identification message is aired. If it is not aired as required by the Communications Act and the Commission's rules, the broadcast station will be subject to enforcement action.

If record companies, or their agents, are paying persons other than the licensee to have records aired, and not disclosing that fact to the licensee, the person making such payments, and the recipient, are subject to fine, imprisonment or both."

To reiterate my comments above, if this is being done, it's illegal.