WASHINGTON — Federal regulators Friday announced an unprecedented settlement with four radio broadcast companies on charges of accepting cash and merchandise from record companies in exchange for airplay, an illegal practice known as payola.

The four broadcasters will pay a $12.5 million fine and agree that their 1,653 stations won’t engage in “payola” practices, according to a consent decree with the Federal Communications Commission.

The radio companies involved— Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp. — represent four of the nation’s six largest radio station owners. They admit to no wrongdoing under the three-year settlement.

Clear Channel recently sold its Lincoln stations, The Blaze, 96KX, 106.3 and The Eagle, to Three Eagles Communications.  

But Clear Channel still owns five stations in Omaha — KFAB, KGOR, US 93.3, The Brew 96.1 and KAT 103,  and three in Ogallala.  None of the other companies have stations in Nebraska, according to their Web sites. 

A separate agreement was negotiated by the American Association of Independent Music and the radio groups. In that deal, the broadcasters agreed to provide 8,400 half-hour segments of free airtime for independent record labels and local artists.

The free airtime, between 6 a.m. and midnight, would be granted to companies not owned or controlled by the nation’s four dominant music labels — Sony BMG Music Entertainment, Warner Music Group, Universal Music Group and EMI Group. CBS will provide 800 hours, Citadel 1,300, Clear Channel 1,600, and Entercom 500, according to a list obtained by The Associated Press.

“Payola hurts musicians, the radio industry and the free flow of creative talent because music is chosen on the basis of who can pay the most — not who sounds the best,” said FCC Commissioner Jonathan Adelstein, who has been largely credited with pushing the two-year investigation. “While this settlement is not a panacea to all payola woes, it requires the implementation of certain meaningful reform measures that should change corporate practices and behavior.”

Paul Porter, co-founder of media watchdog group Industry Ears, says the agreement does not go nearly far enough.

“You’re basically talking about a fine and a fine doesn’t stop payola,” Porter said.   The broadcasters did not have to admit guilt and Porter said he expects radio playlists to remain virtually unchanged. “Twelve million dollars is nothing for the big four companies,” Porter said.

Representatives from Clear Channel, CBS Radio, Entercom and Citadel could not be reached for comment.

The consent decree is the second-largest penalty ever assessed by the FCC, trailing only a $24 million settlement reached with Univision Communications Inc. regarding children’s television obligations.

Payola has been around as long as the radio industry and was made illegal after scandals in the late 1950s, but it can be difficult to prove.

Under the terms of this settlement, broadcasters agree to closer scrutiny in dealings with record companies, including limits on gifts, a promise to keep a database of all items worth more than $25 supplied by those companies, the employment of independent compliance officers to make sure stations follow the rules and a new “payola hot line” for employees to report infractions.

Under the separate agreement with the independent music group, a set of “rules of engagement” are aimed at requiring equal access to radio music programmers for all record companies as well as transparency in their dealings, Gordon said.