FCC Panelist Wants Probe Of Product 'Payola'

A member of the Federal Communications Commission called yesterday for an investigation of experts who tout products on television without disclosing payments from the manufacturers.

Commissioner Jonathan Adelstein said that such appearances violate the federal law against "payola" and that he is urging the agency to take action against networks, stations and individuals who fail to disclose the payments involved.

"I was shocked by the lack of awareness that there were laws in place to try to prevent these things," said Adelstein, a Democrat appointed by President Bush. If such payments from companies aren't disclosed, he said, "it's not just a question of ethics. It's payola, and it's against the law."

Adelstein cited reports in the Wall Street Journal and Washington Post that technology and other experts who are paid tens of thousands of dollars by such companies as Sony, Apple and Hewlett-Packard have positively discussed the firms' products on NBC's "Today" show, other network programs and during "satellite tours" of local TV stations.

This, said Adelstein, is a violation of Section 317 of the Federal Communications Act requiring stations to announce when they are airing material for which they have received a payment or other consideration.

The commission recently acted in a related area. In a unanimous ruling last month, the FCC ordered broadcasters to disclose the origin of video news releases produced by the government or corporations. Congressional Democrats have sharply criticized the Bush administration for releasing such prepackaged "news" stories without an on-air explanation that the narrators are consultants, not reporters.

NBC has said it was unaware of the corporate payments to two of its freelance contributors who evaluate products but has since updated its policies. "It's the job of networks and broadcasters to find out," Adelstein said. "The law requires that they engage in reasonable diligence."

Adelstein said he has discussed the matter only briefly with the commission's new chairman, Republican Kevin Martin. He said individual violators, after being subject to a first citation, could face fines of as much as $10,000 and, if the Justice Department chose to prosecute, as much as a year in jail.

"It's very deceptive to pretend to be an objective expert when in fact you're shilling for some private company," Adelstein said. "If you don't disclose, you're trying to pull the wool over the public's eyes."