October 2000 Update


By: Lawrence G. Walters


The federal government is ready to take on the porn industry. The storm clouds are gathering on both the regulatory front as well as in the Legislature. Election time has arrived.

It was predictable that online porn would become somewhat of an election issue from the beginning. Even Al Gore, who is generally seen as the better candidate for the adult industry, has pledged to fight pornography on the Internet.

Recently, however, the issue of on-line porn has gotten more attention in light of the creation of the Commission on Child Online Protection, which was established to investigate options in regard to Internet pornography. While the Commission unanimously endorsed a largely hands-off approach to the Internet, it did call for increased enforcement of deceptive or unfair practices laws to punish Webmasters for enticing children to view obscene material, and contended the practices of “mouse trapping” and deceptive meta tagging. D. McCullagh, “Porn Panel: Nix ‘Mouse-trapping’” Wired News, October 6, 2000.

Shortly after the porn panel made its recommendations, the Federal Trade Commission took severe administrative action against Verity International, an online porn company located on the Island of Starke, in the English Channel, for allegedly billing more than 110 thousand United States consumers for hundreds of dollars each in false long distance charges incurred for dialing adult websites. The company offered a seemingly attractive alternative to credit card billing for adult websites by allowing the customer to have the charges placed on their long distance telephone bill. The FTC Complaint claims that Verity lured customers into obtaining their services by telling the users they were being charged $3.99 a minute for a call to an adult entertainment site in Madagascar, when the call actually was routed through London at a higher rate. The FTC estimates roughly 25 million dollars is in question in this case. That figure underscores the tremendous growth and popularity of adult Internet sites in recent times. The FTC Complaint also alleges that a subsidiary of Verity, a company called Crescent Communications, inappropriately billed users’ credit card numbers, which they were asked to provide only for age verification. Those charges allegedly added up to $188 million from 1997 to 1999. We can expect to see more and more aggressive action on behalf of federal agencies against online porn companies as election time draws nearer. Should the Republican administration take over, the morality groups will likely push the newly-appointed Attorney General into significant prosecution of adult webmasters based on the content of their sites.

Already, a Bill has been introduced into the House seeking five million dollars for the prosecution of obscenity cases at the federal level. Another Bill has been introduced by Congressman Duncan Hunter (R-Calif), HR 5045, which would allow a minor who alleges to have been “harmed” from the exposure to legal adult materials, to demand money damages from the producers or distributors of that material. This Bill, introduced in July, was quickly referred to the House Judiciary Committee and sent to the Subcommittee on Courts and Intellectual Property. Apparently, the thinking is: If fear of going to jail won’t force online porn distributors to run for cover, perhaps fear of frivolous lawsuits will. Our firm is closely monitoring the progress of this and other anti-porn bills through the legislative process. Internet porn is an easy political target, and one which candidates can use as a scapegoat to get votes in this extremely close election.

In other developments, the Internet Corporation for Assigned Names and Numbers (ICANN) accepted forty-seven proposals for new top-level domain name suffixes in a bidding process that ended October 2, 2000. It is expected that several new suffixes will soon become available such as .kids, .sex, .xxx, .info, .site, .web and .pro. Internet registration companies paid a non-refundable $50,000.00 application fee to submit their proposed suffix. ICANN is expected to announce the list of new suffixes by November 20, 2000. This would be the first major growth in top-level domain suffixes in more than a decade. Advocates on both sides of the censorship issue have called for clustering or grouping of adult entertainment sites into a cyber-Red Light zone, with a .sex or .xxx domain. Civil libertarians have largely criticized that proposal as the “ghettoizing” of erotic speech online. The Commission on Child Online Protection rejected such a proposal, instead calling for more “public education” and “responsible adult empowerment.”

On the adult nightclub scene, two clubs obtained at least partial victories in the courts this month. The first came out of the State of West Virginia which has a Statewide adult entertainment law, unlike most other states which regulate adult entertainment at the local level. This state law was ruled unconstitutional by the United States District Court. The judge found that the law targeted conduct protected under the First Amendment and was unconstitutionally vague. Of particular concern was the requirement that an applicant for an adult dance club license be of “good moral character.” Nobody really knows what that means, thus allowing state officials to deny adult entertainment licenses on an ad hoc basis. The second case came out of the City of Cumberland, Wisconsin, where City officials obtained substantial help from anti-sex religious groups including the National Family Legal Foundation to assist them in putting adult entertainment out of business in Cumberland. The City largely copied the NFLF’s model ordinance that it circulates throughout the country, and passed a restrictive anti-adult entertainment law even prohibiting “sensual erotic movements” by dancers. Although the Court upheld part of the law, it declared the prohibition on erotic movements unconstitutional, noting: “The dominant theme of nude dance is an emotional one; it is one of eroticism and sensuality…The dancer may use non-sexually explicit elements and semi-nudity to convey a certain degree of sensuality, but putting taste aside, more explicit and erotic content is commonly available on prime time television without being fairly regarded as adult entertainment”

Although these two victories for the First Amendment should be celebrated, such victories these days are few and far between, given the conservative nature of most federal judges in the U.S. However, as the restrictions on adult entertainment become more and more severe the courts will (hopefully) be left with no choice but to declare these laws unconstitutional. Our firm will continue to do its part by monitoring these decisions and providing regular updates. We may even win a few cases for good measure.