MEMORANDUM

  TO:     All Internet Clients

  DATE:   February 2, 1996

  RE:     Telecommunications Act Imposes Controls on Indecent and
          Obscene Content on the Internet and Online Services


  The newly-enacted Communications Decency Act of 1996  states that it is the
policy of the United States to "promote the continued development of the
Internet and other interactive computer services."  But, for the first time,
it puts the federal government in the business of regulating the Internet
and online services.  The legislation does not go as far as some had feared,
but further than others had hoped.

  The statute prohibits the use of interactive computer services to make or
make available an indecent communication to minors. It defines indecency
as: "any comment, request, suggestion, proposal, image, or other
communication that, in context, depicts or describes, in terms patently
offensive as measured by contemporary community standards, sexual or
excretory activities or organs." This definition has been upheld in other
cases involving the broadcast media. The bill's supporters expect that it
will withstand the inevitable Constitutional challenge. Indeed, Congress
provided that any challenge should first go to a special three-judge panel
and then directly to the Supreme Court. The Conference Committee Report
accompanying the bill argues that the new indecency prohibition will "pose
no significant risk to the free-wheeling and vibrant nature of discourse or
to serious literary, and artistic works that can be currently found on the
Internet, and which is expected to continue and grow."

  The language requires that the communication must be knowing and
specifically exempts online service providers who merely provide access to
the Internet. The Conference Report states that the intent is to focus on
"bad actors and not those whose actions are equivalent to those of common
carriers." This is good news for those service providers who only host
content for others and exercise no control over the content. But, the
legislation goes on to state specifically that it is not the intent of
Congress to treat online services as common carriers or telecommunications
carriers for other purposes. If the online services were to be considered
as common carriers, they would be insulated from liability for any content
on their systems. Thus, the question of liability of online services for
defamation and copyright and trademark infringement remains unclear.

  The legislation also provides a "Good Samaritan" defense for service
providers who have taken "in good faith, reasonable, effective and
appropriate actions under the circumstances to restrict or prevent access by
minors" to prohibited communications or have restricted access to indecent
content by means of a verified credit card, debit account, adult access
code, or adult personal identification number.

  The role of the Federal Communications Commission is restricted under the
new law. The FCC is only permitted to describe measures that are
reasonable, effective and appropriate to restrict access to prohibited
communications, but it cannot give its approval to such measures nor can it
penalize any service provider for failing to use the measures.


  The new law also prohibits states from exercising control over content of
online services. States can control content entirely within their borders
so long as the control is not inconsistent with the federal law. Some state
legislatures had, in reaction to publicity over alleged pornographic and
indecent content online, considered bills that would have put tight
restrictions on content.

  The full text of the entire Telecommunications Act of 1996, incorporating
the Communications Decency Act of 1996, and the Conference Report are
available on our World Wide Web site: http://www.commlaw.com/.

                                            Sincerely yours,

                                            PEPPER & CORAZZINI, L.L.P.


                                            By:___________________________
                                                    Neal J. Friedman

  _____________________________________________________________
 |Neal J. Friedman  | Pepper & Corazzini, LLP   |Voice:       |
 | njf@commlaw.com  |   1776 K Street, N.W.     | 202-296-0600|
 |Telecommunications|       Suite 200           |Fax:         |
 |& Information Law |  Washington, D.C. 20006   | 202-296-5572|
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 |____________________________________________________________|


Copyright 1996, Pepper & Corazzini, L.L.P.  All rights reserved.  This
document may be reproduced in free media so long as it is not altered and
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