Playboy Has Date with Supreme Court

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Washington -- The Supreme Court agreed last week to review
whether a 1996 channel-scrambling law aimed at adult networks violates the First Amendment
rights of Playboy Entertainment Group Inc.

The decision was a setback for Playboy, which had urged the
high court to affirm its December victory before a three-judge panel in Wilmington, Del.

The case will be the most important one for the cable
industry to reach the Supreme Court since the battle with broadcasters over the
constitutionality of the law requiring operators to carry local TV signals.

Playboy attorney Robert Corn-Revere said he was not
surprised that the court took the case because it seldom affirms lower-court decisions
that nullify acts of Congress.

"Where an act of Congress is declared unconstitutional
… I think you can recognize the probability that the court will take it," said
Corn-Revere, a partner in Hogan & Hartson.

Oral arguments in the case won't be heard until the
fall, with a decision handed down in early 2000.

At issue is Section 505 of the Telecommunications Act of
1996. Sponsored by Sens. Trent Lott (R-Miss.) and Diane Feinstein (D-Calif.), the
provision addressed concerns that cable homes that didn't subscribe to Playboy TV
were occasionally picking up erotic sounds and images from the channel due to poor signal
scrambling by cable operators.

The lawmakers' solution was to give cable operators a
choice: Either fully scramble Playboy, or air the network only between 10 p.m. and 6 a.m.,
when children are unlikely to be watching TV.

Playboy challenged the law, saying that operators would
automatically choose the "safe-harbor" period rather than incurring the
substantial costs to upgrade their scrambling technology. The law, Playboy argued,
banished the network from two-thirds of the broadcast day and cost it millions of dollars
in revenue.

The three-judge panel held that Section 505 was a
content-based law that had to pass the toughest standard of review -- strict scrutiny,
which requires the government to have a compelling reason and to employ the least
restrictive means to achieve its goal.

The panel said Section 505 was not the least restrictive
means. The court found that Section 504 of the law was less restrictive on speech because
it required cable operators, after receiving requests from subscribers, to block or
scramble Playboy in those subscribers' homes at no cost.

In seeking Supreme Court review, the Department of Justice
said Section 505 was a minimal burden on speech in light of the "substantial
evil" it hoped to stamp out. The DOJ also argued that the panel incorrectly held the
government to the highest standard of review.

Supreme Court observer Bruce Fein, a former general counsel
at the Federal Communications Commission, said a cable signal-bleed case was not
significant in the annals of First Amendment jurisprudence.

"I think you are working at the margins of the First
Amendment. This is not a landmark case," he added.

Fein said if the government were to win the case, it would
not assist the cause of those on Capitol Hill, such as Sen. Ernest Hollings (D-S.C.), who
want broadcasters and cable operators to air violent programming only between 10 p.m. and
6 a.m.

"The court has never equated violence and sex,"
he added.

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