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updated 7/13/2010 1:41:20 PM ET 2010-07-13T17:41:20

A federal appeals court on Tuesday tossed out a government policy that can lead to broadcasters being fined for allowing even a single curse word on live television, concluding that the rule was unconstitutionally vague and had a chilling effect on broadcasters.

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The 2nd U.S. Circuit Court of Appeals in Manhattan struck down the 2004 Federal Communications Commission policy, which said that profanity referring to sex or excrement is always indecent.

"By prohibiting all 'patently offensive' references to sex, sexual organs and excretion without giving adequate guidance as to what 'patently offensive' means, the FCC effectively chills speech, because broadcasters have no way of knowing what the FCC will find offensive," the appeals court wrote.

"To place any discussion of these vast topics at the broadcaster's peril has the effect of promoting wide self-censorship of valuable material which should be completely protected under the First Amendment," it added.

The court said the FCC might be able to craft a policy that does not violate the First Amendment.

FCC spokeswoman Jen Howard had no immediate comment.

"The score for today's game is First Amendment one, censorship zero," said Andrew Jay Schwartzman, policy director of Media Access Project, which joined the case on behalf of musicians, producers, writers and directors.

Carter Phillips, a Washington lawyer who argued the case for Fox Television Stations Inc., called the decision satisfying. He said the court had "sent the FCC back to square one to start over" by not only tossing the FCC's fleeting expletive policy but also a broader indecency policy as unconstitutionally vague.

The FCC fleeting expletive policy was put in place after a January 2003 NBC broadcast of the Golden Globes awards show, in which U2 lead singer Bono uttered the phrase "f------ brilliant." The FCC said the F-word in any context "inherently has a sexual connotation" and can lead to enforcement.

Fox Television Stations, owned by Rupert Murdoch's News Corp., and other networks challenged the policy in 2006 after the FCC cited the use of profanity during awards programs that were aired in 2002 and 2003.

The FCC found its ban also was violated by a Dec. 9, 2002, broadcast of the Billboard Music Awards in which singer Cher used the phrase "F--- 'em" and a Dec. 10, 2003, Billboard awards show in which reality show star Nicole Richie said, "Have you ever tried to get cow s--- out of a Prada purse? It's not so f------simple."

The ruling by the three-judge panel came after the Supreme Court last year upheld the policy on procedural grounds and returned it to the 2nd Circuit for consideration of constitutional arguments. The 2nd Circuit in 2007 had found in a 2-to-1 ruling that the policy was "arbitrary and capricious."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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