Court rejects FCC broadcast decency rule

By Martha Graybow

NEW YORK (Reuters) - A U.S. appeals court on Monday overruled federal regulators who decided that expletives uttered on broadcast television violated decency standards, a major victory for TV networks.

The U.S. Court of Appeals for the Second Circuit in New York, in a divided decision, said that the U.S. Federal Communications Commission was "arbitrary and capricious" in setting a new standard for defining indecency.

The court sent the matter back to the commission for further proceedings to clarify its indecency policy. The FCC, which said it was still studying the opinion, could decide to ask the U.S. Supreme Court to reverse the appeals court.

The case stems from a March 2006 ruling by the commission that News Corp.'s Fox television network had violated decency regulations when singer Cher and actress Nicole Richie blurted out profanities during the 2002 and 2003 Billboard Music Awards' shows. No fines were imposed by the regulators.

Fox had challenged the FCC's decision to the appeals court, arguing that the government's decency standard was unclear, violated free speech protections and that the rulings had contradicted findings in past cases.

The three-member appeals panel focused on whether expletives were used repeatedly or were only uttered fleetingly. The FCC had argued that, under certain conditions, one utterance of an expletive can rise to the indecency standard.

"We find that the FCC's new policy regarding 'fleeting expletives' represents a significant departure from positions previously taken by the agency and relied on by the broadcast industry," Judge Rosemary Pooler wrote for herself and Judge Peter Hall in the majority decision.

"We further find that the FCC has failed to articulate a reasoned basis for this change in policy," the ruling said. "Accordingly, we hold that the FCC's new policy regarding 'fleeting expletives' is arbitrary and capricious."

The court did not rule on constitutional challenges to the FCC's policy. But the majority of the judges suggested it could be tough for the commission to prevail on constitutional grounds.

"We are skeptical that the commission can provide a reasoned explanation for its 'fleeting expletive' regime that would pass constitutional muster," the majority wrote.

Judge Pierre Leval issued a dissent, writing that he believed the FCC "gave a reasoned explanation for its change of standard."

"Although one can reasonably disagree with the commission's new position, its explanation - at least with respect to the F-Word -- is not irrational, arbitrary or capricious," he wrote.

FCC spokesman David Fiske said the commission was reviewing the decision.

Fox said it was "very pleased with the court's decision" and that it believes "that government regulation of content serves no purpose other than to chill artistic expression in violation of the First Amendment."

"Viewers should be allowed to determine for themselves and their families, through the many parental control technologies available, what is appropriate viewing for their home," Fox said.