Court blocks new curbs on smut Playboy wins order halting restrictions in communications act

March 09, 1996|By BLOOMBERG BUSINESS NEWS

WILMINGTON, Del. -- Playboy Entertainment Group Inc. won a temporary restraining order yesterday that halts the portion of the new federal telecommunications law that forces cable companies to further scramble or block "indecent programming."

U.S. District Judge Joseph Farnan, in issuing the order, said Playboy has demonstrated that it is likely to succeed in its argument that the new cable rule violates the First and Fifth Amendments, and would suffer irreparable harm if the new scrambling rule were implemented.

"This is a victory for sanity in government," Christie Hefner, Playboy chairman and chief executive, said in a statement.

Under the Telecommunications Act of 1996, cable companies would have had to take steps by today to ensure that cable

shows "primarily dedicated to sexually oriented programming or other programming that is indecent" don't accidentally leak into the homes of non-subscribers.

Cable companies were given 30 days -- until today -- to install traps or converter boxes in the homes of millions of cable subscribers.

The Federal Communications Commission said this week that until cable operators comply with the rule, indecent programs must be canceled or "channeled" to be shown between 10 p.m. and 6 a.m.

The next stage of the court proceedings in the Playboy case are evidentiary hearings for a preliminary injunction before a three-judge panel in the U.S. District Court in Delaware.

Judge Farnan said in his opinion that Playboy raised "serious and substantial questions" on whether the cable rule is the "least restrictive means in regulating the accessibility of adult programming to minors."

Can be blocked now

Playboy had argued that cable viewers who experience problems with adult-content audio or video leaking into their homes can have their cable providers install "lock boxes" to fully block the signals.

Judge Farnan also said that Playboy would suffer irreparable harm if the rules were imposed because the Supreme Court has said that the loss of First Amendment rights, "for even minimal periods of time, unquestionably constitutes irreparable injury."

Justice Department attorneys had argued that the government has the right and duty to regulate the distribution of indecent material if it can be viewed or heard by children.

Playboy said the rule discriminates illegally because it doesn't apply to other cable networks, such as HBO and Showtime, that at least sometimes offer shows that are as sexually explicit as Playboy fare.

Under the law, the burden of blocking signals would fall on cable companies, not Playboy.

However, Playboy filed the lawsuit because it said it would be irreparably harmed by restrictions on its programming.

The company's lawyers said that in addition to the loss of its constitutional rights to free speech and equal protection, the company could lose revenue, but it hasn't estimated how much.

"Playboy has shown that adult-oriented cable television will effectively be turned off upon the implementation" of the new scrambling rule, causing "significant financial losses for both the cable companies and Playboy," Judge Farnan wrote in his opinion.

Would cost up to $1 billion

Playboy had estimated the cost of installing traps or converter boxes to comply with the new act would be between $300 million and $1 billion, depending on the technology cable operators employed.

The company said its programming is offered by about 500 cable systems and is available to an estimated 21 million homes.

Federal law already required cable operators to provide lock boxes that will totally block out any channel a customer chooses. Further, under the new act, cable operators are required to provide such devices free upon request. Playboy said it supports that provision.

Pub Date: 3/09/96

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