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COURT RESTRAINS ENFORCEMENT OF FULL SCRAMBLING PROVISION

NEW YORK, March 7 /PRNewswire/ -- The SPICE NETWORKS, a wholly owned subsidiary of Graff Pay-Per-View Inc. (Nasdaq-NNM: GPPV), announced today that the United States District Court issued a temporary restraining order (TRO) precluding the Government's implementation or enforcement of Section 505 of the Telecommunications Act of 1996 which requires cable operators to fully scramble the audio and video signals of television channels that are "primarily dedicated" to "sexually- oriented" programming.

The Court found that SPICE and Playboy had "demonstrated [that they would be]likely to succeed on the merits of [their] claim that section 505 of the Telecommunications Act of 1996 violates the First Amendment of the United States Constitution." The practical effect of the grant of the TRO, is that enforcement of Section 505 is likely to be enjoined at least until the Supreme Court issues its decision on the provision which may not occur until 1997. The provision will never take effect if the Supreme Court then declares the provision unconstitutional.

SPICE is challenging Section 505 as a discriminatory content based restriction on speech that would substantially and gratuitously impair the rights of adults to receive constitutionally protected programming.

A three judge panel of the District Court will hear the Company's motion for a preliminary injunction. The Act provides for automatic review by the Supreme Court which will ultimately decide the constitutionality of the provision.

"We are very pleased that the Court enjoined the enforcement of the provision, recognizing the complexity of the issues and the practical implications to the cable industry," commented Steve Saril, President of SPICE Networks.

The Company reiterated its belief that there are sufficient safeguards in existence to protect minors, such as lockboxes and the now mandatory provision for cable operators to respond to customers' requests to fully block any programming.

Graff Pay-Per-View Inc. is a diversified media entertainment company which owns and operates television networks in North America and Europe, provides telecommunications and television production services principally to the pari-mutuel wagering industry, produces and distributes television programs and motion pictures and together with partners, provides conditional access video delivery systems.
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/CONTACT: Ninanne Norris of Graff Pay-Per-View Inc., 212-941-1434; or Tina Clarke of Spice Networks, 212-941-1434; or Kerry Thalheim of Financial Relations Board, 212-661-8030/

(GPPV)

CO: Graff Pay-Per-View Inc.; Spice Networks ST: New York IN: ENT TLS SU:

SR-NT -- NYTH112 -- 1422 03/07/96 21:19 EST
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Publication:PR Newswire
Date:Mar 7, 1996
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