Court Strikes Down Adult Scrambling

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Wilmington, Del. -- Playboy Entertainment Group Inc. won
the latest round in its battle to defeat a federal law that kept adult television
programming off many cable systems during daytime hours.

A panel of three federal judges declared Section 505 of the
Telecommunications Act of 1996 to be unconstitutional on First Amendment grounds,
according to a Playboy representative.

The law, as interpreted by the Federal Communications
Commission, required cable systems to completely scramble audio and video signals of
sexually oriented and indecent programming, or to show that programming only between 10
p.m. and 6 a.m.

The law was aimed at protecting children from images and
sounds that "bleed through" imperfectly scrambled signals. Many cable operators
indicated that they would restrict Playboy and other adult pay-per-view programming to the
so-called safe-harbor hours, rather than spending the money to fully scramble it.

The court did uphold a section of the law that requires
total scrambling when requested by a cable subscriber, and Playboy will reportedly have to
notify consumers that cable operators will, without charge, block channels that parents
find offensive.

Robert Corn-Revere, an attorney who represented Playboy,
said the court struck down Section 505 because it was not the least restrictive means of
achieving the government's goal of protecting children.

The Department of Justice, which defended the case, did not
have an immediate reaction to the ruling last Wednesday.

Corn-Revere said the ruling gave cable operators the
freedom to decide whether to carry Playboy TV on a full-time basis.

In August 1997, the same three judges denied Playboy's
request for a preliminary injunction against Section 505 and allowed the provision to take
effect.

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