Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of:                | * | CS Docket No. 96-40          |
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| Implementation of Section 505 of | ) |                              |
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| Telecommunications Act of 1996   |   |                              |
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| Scrambling of Sexually Explicit  | * |                              |
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| Service Programming              | * |                              |
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| Repeal of Section 76.227         | * |                              |
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**ORDER**

**Adopted:** November 19, 2001 **Released:** November 21, 2001

By the Commission: Commissioner Copps issuing a statement

1.  By this *Order*, we repeal Section 76.227 of the Commission's rules,
    47 C.F.R. § 76.227, because the underlying statutory provision,
    Section 641 of the Communications Act of 1934, as amended,[^1] was
    found to be unconstitutional by the United States Supreme Court.[^2]
    We also terminate the pending rulemaking in CS Docket No. 96-40,
    *Implementation of Section 505 of the Telecommunications Act of
    1996: Scrambling of Sexually Explicit Adult Video Service
    Programming*, Order and Notice of Proposed Rulemaking, which was
    initiated to implement Section 641 of the Act.[^3] These actions
    finalize the staff recommendations considered by the Commission
    earlier this year in the 2000 Biennial Regulatory Review.[^4]

2.  Section 641 requires that any multichannel video programming
    distributor, including any cable television operator, \"providing
    sexually explicit adult programming or other programming that is
    indecent on any channel of its service primarily dedicated to
    sexually‑oriented programming\" either \"fully scramble or otherwise
    fully block the video and audio portion of such channel so that one
    not a subscriber to such channel of programming does not receive
    it,\" or, alternatively, not provide that programming \"during the
    hours of the day (as determined by the \[Federal Communications\]
    Commission) when a significant number of children are likely to view
    it.\"[^5] The provision addressed concerns regarding \"signal
    bleed\" of channels that are devoted to sexually explicit adult
    programming. Signal bleed may occur when a multichannel video
    program distributor partially scrambles or otherwise partially
    blocks the signal on sexually explicit channels in an effort to
    prevent clear reception for those subscribers that do not pay for
    such channels. When sexually explicit material is offered on an
    analog service tier, some images and sounds may be clearly
    identifiable if the scrambling technology is inadequate.

3.  Section 640 of the Communications Act, a companion to Section 641,
    also was enacted as part of the Telecommunications Act of 1996.[^6]
    Section 640 provides that, "upon request by a cable service
    subscriber, a cable operator shall, without charge, fully scramble
    or otherwise fully block the audio and video programming of each
    channel carrying such programming so that one not a subscriber does
    not receive it."[^7] One important difference between Section 641
    and Section 640 is that the operator has a mandatory obligation to
    block programming to *all* households under Section 641, rather than
    to individual households as provided in Section 640. Further,
    Section 640 applies only to cable operators while Section 641
    applies to all multichannel video programming distributors
    ("MVPDs"), including satellite carriers[^8] and open video system
    operators.

4.  On March 5, 1996, the Commission issued an Order and Notice of
    Proposed Rulemaking to implement the new statutory language of
    Section 641 as well as to ask questions concerning the definition of
    certain terms contained in that provision.[^9] At that time, the
    Commission adopted a rule incorporating Section 641(a).[^10] The
    Commission also established an interim rule implementing Section
    641(b), providing that the programming described in subsection (a)
    may not be provided between the hours of 6 a.m. and 10 p.m. if not
    fully scrambled or fully blocked.[^11] The Commission did not
    address Section 640 in that proceeding.[^12]

5.  In 1996, Playboy Entertainment Group ("Playboy") brought suit
    against the government asserting that Section 641 was
    unconstitutional under the First Amendment. A three judge district
    court panel agreed with Playboy, finding that Section 641 was not
    the least restrictive means to advance the government\'s interest in
    protecting children from exposure to sexually‑related material.[^13]
    Indeed, the district court concluded that Section 640 provides a
    less restrictive alternative means to protect those who wish to
    block out unwanted programming.[^14] On that basis, the district
    court issued a permanent injunction barring enforcement of Section
    641.[^15]

6.  On direct appeal by the government, the Supreme Court ruled that the
    scrambling, blocking, and time shifting requirements of Section 641,
    implemented by the Commission, violate the First Amendment.[^16] The
    Court concluded that Section 641 was not the least restrictive means
    to protect individuals from exposure to sexually explicit
    programming. The Court held that compliance with the scrambling
    limitation of Section 641 silenced \"protected speech for two‑thirds
    of the day in every home in a cable service area, regardless of the
    presence or likely presence of children or of the wishes of the
    viewer.\"[^17] Like the district court below, the Court concluded
    that Section 640 provides a less restrictive method for protecting
    children from exposure to explicit materials.[^18] The Court further
    found that the government failed to show that the alternative
    protection under Section 640 would be so ineffective as to justify
    the more restrictive requirements of Section 641.[^19]

7.  Given the Court's decision regarding the unconstitutionality of the
    underlying statutory provision, we hereby repeal Section 76.227 of
    our rules. We also terminate our pending rulemaking proceeding in CS
    Docket No. 96-40. We undertake these ministerial actions without the
    issuance of a Further Notice of Proposed Rulemaking because we
    believe that a further proceeding is unnecessary in light of the
    Supreme Court's decision in *Playboy v. FCC*.[^20]

8.  We note that parents and others concerned about the availability of
    partially scrambled sexual content may rely on advances in
    technology to secure their households from undesirable programming.
    Specifically, we note that the phenomenon of signal bleed is present
    generally where the cable wire is directly connected to the
    television receiver. Signal bleed is circumvented when addressable
    analog set top boxes or digital set top boxes are connected to the
    set.[^21]

9.  The Act provides several legal remedies, working in tandem with
    available technology, for those who object to certain content made
    available over a cable system. First, as Section 640 requires, a
    cable operator must block programming, using any means, if such a
    request is made by a particular subscriber.[^22] Second, a cable
    subscriber may obtain a lock-box from the local cable operator if he
    or she wants to selectively block unwanted material.[^23] Finally,
    subscribers may purchase television sets equipped with V-Chips that
    enable individuals to block television programs, including sexually
    explicit content, assigned a particular rating by the video
    programmer.[^24]

10. Accordingly, **IT IS ORDERED** that Section 76.227 of the
    Commission's rules, 47 C.F.R. § 76.227, **IS REPEALED** upon
    publication of this *Order* in the Federal Register.

11. **IT IS FURTHER ORDERED** that the Commission's rules **ARE
    AMENDED** as set forth in Appendix A.

12. **IT IS FURTHER ORDERED** that CS Docket No. 96-40 **IS
    TERMINATED**.

13. These actions are taken pursuant to Sections 4(i), 4(j) and 303 of
    the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
    154(j), and 303.

    FEDERAL COMMUNICATIONS COMMISSION

    Magalie Roman Salas

    Secretary

    **APPENDIX A**

    **Rule Changes**

    Parts 76 of Chapter 1 of Title 47 of the Code of Federal Regulations
    are amended to read as follows:

    **Part 76-MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE**

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1.  The authority citation for Part 76 is revised to read as follows:

> AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307,
> 308, 309, 312, 317, 325, 503, 521, 522, 531, 532, 534, 535, 536, 537,
> 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 571, 572, and
> 573.

2.  Section 76.227 is removed and reserved.

STATEMENT OF COMMISSIONER MICHAEL J. COPPS

*In the Matter of: Implementation of Section 505 of the
Telecommunications Act of 1996; Scrambling of Sexually Explicit Adult
Video Programming*

Today, as we must, we take steps to conform our rules to the parameters
established in a 5-4 decision of the Supreme Court. Nevertheless, that
the Court found the statute overly broad does not obviate our
responsibility to protect children from indecent and obscene
programming.

Right now, as the Court's minority pointed out, the alternatives
available to parents are woefully inadequate. It is incumbent upon us to
take whatever steps we can, consistent with the First Amendment, to
protect our children from sexually explicit programming in their homes.

I urge the Commission to commence a proceeding to determine how,
consistent with the objectives of Congress as well as the decision of
the Supreme Court, we can protect children from being exposed to
sexually explicit programming without their parents' knowledge.

[^1]: 47 U.S.C. § 561. Section 641 was added by Section 505 of the
    Telecommunications Act of 1996 (Pub. L. No. 104-104, 110 Stat. 56
    (1996)).

[^2]: *U.S. v. Playboy Entertainment Group*, 120 S. Ct. 1878 (2000).

[^3]: 11 FCC Rcd 5386 (1996) ("Scrambling Order").

[^4]: *See 2000 Biennial Regulatory Review*, Report and Order, CC Docket
    No. 00-175, 2001 WL 38123, \_\_ FCC Rcd \_\_ (2001) ¶ 72. ("\[W\]e
    accept staff's recommendation that we consider . . . .(2) the
    elimination of the rules based on section 505 of the 1996 Act,
    including section \[76.227\], related to incompletely scrambled
    sexually-oriented programming that were found to be unconstitutional
    by the recent Supreme Court decision in *United States v. Playboy
    Entertainment Group* . . . .").

[^5]: 47 U.S.C. § 561. This provision concerns only indecent programming
    and not material that is obscene, which is not permitted on cable
    television systems in any instance. *See* 47 U.S.C. § 559 ("Obscene
    Programming. Whoever transmits over any cable system any matter
    which is obscene or otherwise unprotected by the Constitution of the
    United States shall be fined under title 18, United States Code, or
    imprisoned not more that 2 years, or both.")

[^6]: 47 U.S.C. § 560.

[^7]: *Id.*

[^8]: We note that direct broadcast satellite carriers use digital
    technology to provide programming to subscribers. Digital technology
    enables MVPDs to block sexually explicit programming in its entirety
    without any signal bleed.

[^9]: *See* *Scrambling Order.* Some of the questions raised in the
    proceeding included: (1) the hours of the day when children are
    likely to be exposed to partially scrambled signals; (2) the proper
    definition of the term "indecency" for these purposes; (3) the
    appropriate definition of the phrase, "channel primarily dedicated
    to sexually oriented programming;" and (4) the differences in
    technology between MVPDs that might require the adoption of
    differing rules for different entities. *See id*. at 5387-88.

[^10]: "Blocking of indecent sexually‑oriented programming channels. (a)
    In providing sexually explicit adult programming or other
    programming that is indecent on any channel of its service primarily
    dedicated to sexually‑ oriented programming, a multichannel video
    programming distributor shall fully scramble or otherwise fully
    block the video and audio portion of such channel so that one not a
    subscriber to such channel or programming does not receive it." 47
    C.F.R. § 76.227(a).

[^11]: 47 C.F.R. § 76.227(b).

[^12]: *Scrambling Order* at 5386, n. 9. The docket was voluntarily held
    in abeyance during the litigation period.

[^13]: *Playboy Entertainment Group v. U.S*., 30 F. Supp.2d 702 (D. Del.
    1998).

[^14]: *Id.* at 713.

[^15]: *Id.* at 717-719.

[^16]: *U.S. v. Playboy Entertainment Group*, 120 S. Ct. 1878 (2000).

[^17]: *Id*. at 1886.

[^18]: *Id*. at 1888.

[^19]: *Id*. at 1892-93.

[^20]: *See* 5 U.S.C. § 553(b)(B)(notice requirements inapplicable "when
    the agency for good cause finds....that notice and public procedure
    are impracticable, unnecessary, or contrary to the public
    interest").

[^21]: The Supreme Court alluded to this point when it stated that,
    "market-based solutions such as programmable televisions, VCR\'s,
    and mapping systems (which display a blue screen when tuned to a
    scrambled signal) may eliminate signal bleed at the consumer end of
    the cable." *U.S. v. Playboy Entertainment Group*, 120 S. Ct at
    1890. International banking firm and media industry analyst,
    ABN-AMRO, estimate that there are approximately 93.6 million analog
    and digital set top boxes currently deployed in the United States.
    ABN-AMRO 2001 estimates; *see also* Yankee Group Annual
    Technologically Advanced Survey, October 2000.

    We note that as cable operators add digital tiers of service to
    their systems, they appear to be voluntarily migrating sexually
    explicit programming to such tiers. *See* Andrea Figler, *Playboy
    Feels Digital Pain*, CABLE WORLD, August 13, 2001 at 8. *See also*,
    Sally Beatty, *Cable Operators Find New Profit in Pornography*, WALL
    STREET JOURNAL, November 28, 2000 at B1.

[^22]: 47 U.S.C. § 560.

[^23]: 47 U.S.C. § 544(d)(2) ("In order to restrict the viewing of
    programming which is obscene or indecent, upon the request of a
    subscriber, a cable operator shall provide (by sale or lease) a
    device by which the subscriber can prohibit viewing of a particular
    cable service during periods selected by that subscriber.").

[^24]: *See generally*, 47 U.S.C. § 303(x).