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FCC examining broadcasters in music fee row

WASHINGTON (Reuters) - U.S. regulators have launched an inquiry into whether certain broadcasters are refusing to air the music of artists who demand to be paid when their songs are played on the radio.

The Federal Communications Commission reviewed a June petition by a music coalition that accuses radio stations of skipping songs of artists who support legislation aimed at paying royalties to artists.

According to an official notice dated on Friday, the agency is seeking public comment on the petition until September 23. The FCC customarily seeks comment on proposals for new or amended rules, but petitions received on a wide variety of subjects are also published for public comment.

The coalition, called musicFIRST, also said in the petition that some broadcasters are refusing to run advertisements that support the legislation.

Jennifer Bendall, musicFIRST executive director, said broadcasters are using public airwaves to "stifle debate, threaten artists and musicians and undermine the public interest."

At a Senate hearing last week, the music coalition said U.S. broadcasters are getting a free ride when playing music and that the United States is one of a handful of countries that does not pay artists when their songs are played on the radio.

The FCC should look into whether broadcasters are "engaging in a pattern of threats and intimidation against artists to chill their speech and participation in the political process," the group said in its petition.

MusicFIRST, which includes the Recording Industry Association of America (RIAA), said artists whose songs are played on the Internet and satellite radios are compensated.

RIAA members include Vivendi SA's Universal Music Group, Warner Music Group Corp and Sony Corp's Sony Music Entertainment.

The National Association of Broadcasters trade group has said the radio is a big promotional and marketing tool for artists. NAB Executive Vice President Dennis Wharton called the coalition's petition a "distortion."

"Contrary to suggestions in the petition, broadcasters are under no obligation to carry everything that is offered or suggested to them," Wharton said in a statement.

Wharton said that, according to a 1973 Supreme Court ruling, broadcasters are not required to accept paid "editorial" ads.

In its notice, the FCC said it is looking into what extent certain broadcasters are "targeting and threatening" artists who have spoken out in favor of the legislation, which is called the Performance Rights Act (PRA).

The bill is backed by the House Judiciary Committee. During a August 4 hearing, Senate Judiciary Committee Chairman Patrick Leahy urged both sides to work out their differences because "legislation will move" in the Senate.

The agency said it is also reviewing to what extent broadcasters are engaging in a media campaign, including whether they are disseminating "falsities" about the PRA.

"We recognize that substantial First Amendment interests are involved in the examination of speech of any kind and it is not clear whether remedies are necessary or available to address the actions alleged by MusicFIRST," the FCC added.

(Reporting by John Poirier; editing Bernard Orr and Andre Grenon)

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