News

AT & T Adds Hot Net and Attracts Heat

6/04/2000 8:00 PM Eastern

A conservative media watch-dog group wants the Department of Justice to investigate AT & T Broadband for possible federal pornography-law violations after the MSO signed a distribution deal with explicit adult pay-per-view service The Hot Network.

AT & T Broadband said last week that it would carry The Hot Network-formerly Spice Hot before Spice Networks sold it to adult-video producer Vivid Video-on digital PPV, although it would not reveal in which markets the service would be added.

The Rev. Donald Wildmon's American Family Association wrote to Attorney General Janet Reno last week, asking her to investigate AT & T Broadband. It also asked Rep. Billy Tauzin (R-La.), chairman of the House Commerce Subcommittee on Telecommunications, to review the matter.

The Hot Network provides a less-edited version of the kind of programming seen on Playboy TV or Spice, but Hot's fare is less explicit than triple-X videos.

AFA officials said they had not seen the service's programming, drawing conclusions from an article in The Wall Street Journal last week, which AFA executives interpreted as saying that the MSO would carry "hard-core pornography" on cable.

"Title 18, Section 1468 of federal criminal law prohibits the distribution of obscene material by cable television to anyone, and it is not a defense that the material is provided to willing consumers," AFA vice president Tim Wildmon said in a statement.

AT & T Broadband spokeswoman Tracy Hollingsworth said only that the MSO is offering The Hot Network to provide "customer choice and to compete against strong competition in the marketplace."

Direct-broadcast satellite services DirecTV Inc. and EchoStar Communications Corp.'s Dish Network offer either The Hot Network or New Frontier Media's The Erotic Network, which provide more explicit adult programming.

The Hot Network president Bill Asher called it "regretful that [the AFA] has taken this position despite the fact that the network is offered on pay-per-view, it's digitally secure and it features parental control that groups of this type have been seeking for years."

Other MSOs also offer racy adult-PPV programming: Seven of the top 10 MSOs carry The Hot Network, according to the network. But AFA director of government affairs Patrick Treuman said his group was "trying to make an example" of AT & T Broadband.

"We're now at a point where a major corporation in America is deciding to go into this area of porn, and they really can't afford to get into that if an investigation is launched," Treuman said. "If a grand jury investigates, it could negatively affect [AT & T Corp.'s] stock, and there's a possibility that AT & T executives could be prosecuted."

Treuman conceded it was unlikely that the DOJ would act quickly, if at all, on the group's request.

But Treuman-a former DOJ official during the Reagan and Bush administrations-said he believes AT & T Broadband and other cable operators could face more scrutiny in the future under a more conservative George W. Bush administration should Bush win in November.

The controversy comes soon after the U.S. Supreme Court's decision to strike down section 505 of the Telecommunications Act of 1996, which pertains to effective scrambling of adult programming.

In a 5-4 decision May 22, the high court affirmed a 1998 lower-court ruling that the channel-scrambling law violated Playboy TV's First Amendment rights by keeping programming off some cable systems for 16 hours per day.

The prohibition in section 505 did not directly affect adult networks distributed on the more secure digital-cable platform, but the law did have an affect on analog distribution of adult networks.

The Hot Network and TEN generate 50 percent to 100 percent higher buy-rates than the milder adult fare.

Operators also charge higher retail prices for The Hot Network, while retaining as much as 80 percent of those sales, compared with 60 percent to 70 percent for Playboy and Spice, respectively. That bottom-line appeal has led to growing cable distribution for Hot and TEN as the secure digital platforms have proliferated.

But not all operators are enamored with such programming. Adelphia Communications Corp., for example, has maintained a no-adult-PPV policy even after rolling out digital.

Time Warner Cable spokes-man Mike Luftman said his MSO has no immediate plans to offer The Hot Network, TEN or any other explicit adult product, despite the potential revenue opportunities.

"We certainly respect AT & T's decision to offer The Hot Network, but we have made an editorial decision based on the explicit sexual content of the services," Luftman said.

He also pointed out that the MSO has not offered other PPV programs due to excessive violence, such as the Ultimate Fighting Championship.

"Clearly, there are customers who wanted this product, but our feeling is that if we leave a little money on the table, so be it," he added.

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