"Payola" is the practice by which record companies routinely pay millions of dollars in independent promotion fees to consultants who in turn ensure radio play from radio conglomerates. U.S. record labels pay out an estimated $100 million-plus a year to influence airplay on stations owned by the nation's biggest broadcasters, making payola the industry standard in the U.S.’s deregulated radio environment.

Rep. John Conyers Jr. of Michigan, the ranking Democrat on the House Judiciary Committee and an amateur musician, plans to revisit the issue of payola on the public airwaves by launching federal hearings to address questionable payments record labels make to radio stations to promote certain songs. They would be the first such federal hearings in over a decade and since Congress passed the 1996 Telecommunications Act, which eliminated most restrictions on broadcast mergers. Industry consolidation since the Telecom Act went into effect has arguably caused the problem with payola to become worse. Before 1996, a broadcaster could own only twenty-four stations and no more than two stations per market; now, a broadcaster can own an unlimited total number of stations nationwide and up to eight per market. Such consolidation has led to allegations that radio station owners charge record companies to play their music but do not disclose the payments to the government and on the air to their listeners, as required by law.

Radio stations allegedly evade the laws pertaining to payola by accepting payments in the form of gifts, vacation travel, and other luxuries. Record labels sidestep payola laws by hiring independent record promoters to pay stations "annual budgets." Most independent promoters base their budget deals with radio stations on the bank formula concept, a model in which an internal log lists the date the station airs a song followed by a specific dollar figure the station will be paid by the artist's label--an act that clearly pulls away the guise of the annual budget. Seemingly more concerned about bad lyrics than bribes, however, The Federal Communications Commission has imposed only one payola fine on a major radio group.

RAC joins the increasing number of citizen groups, community activists, and musicians who are up in arms over the issue of payola. Payola stifles creativity, helping to explain the lack of innovation in today’s musical landscape. Simply put, there isn’t much room for musical diversity when a certain kind of music is buying time on the airways. Many artists' careers get compromised because of payola transactions, and many more never even get the chance to get their careers out of the gates. Ultimately, however, it's not just the artist who loses. The culture loses, as well.