Graff Pay-Per-View to appeal Delaware decision to U.S. Supreme Court

Business Wire, Nov 12, 1996

NEW YORK--(BUSINESS WIRE)--Nov. 12, 1996--Graff Pay-Per-View Inc. (NASDAQ-GPPV) today announced that it will file an appeal with the U.S. Supreme Court in response to the November 8th decision by a three-judge panel in U.S. District Court in Delaware denying a request for a preliminary injunction against enforcement of Section 505 of the Telecommunications Act of 1996.

At the same time, Graff stated that it will also file a Stay of Enforcement Pending Appeal. Both motions will be filed in U.S. District Court in Delaware.

Section 505 requires cable systems to fully scramble the audio and video signals of adult programming networks such as Spice and Adam & Eve Channel. If a cable system cannot comply with the full scrambling requirement, it can only distribute the programming during the "safe harbor" hours of 10 p.m. to 6 a.m., a practice known as "time channeling."

"This is an important first amendment issue that hits at the heart of protected speech in a cable environment and we are disappointed in the decision of this three-judge panel," said Steve Saril, president of Spice Networks, a Graff operating unit. "The ruling ignores the fact that Spice's programming is already scrambled. Moreover, Section 504 of the Act requires operators to block both the audio and video of a transmission if the customer requests it.

"We fully support the provisions of Section 504 and believe that it is the least restrictive means of protecting minors from unauthorized reception of adult programming.

"We also believe that ordinary consumers will be denied constitutionally protected programming simply because they cannot, because of the hours they work or other life-style needs, view during the 'safe harbor' hours," he said.

Saril noted that Spice had contingency planning in place to cover all likely scenarios, both before and after final Supreme Court review of the Appeals Court decision. "We are confident of the Supreme Court's sound judgement in this important First Amendment issue, and we will certainly comply with all aspects of whatever decision it makes," he said.

Graff Pay-Per-View is a leading provider of adult television programming.

CONTACT: Graff Pay-Per-View

Tina Clarke, 212/219-6267

or

The Miller Company

Gregory Miller, 914/834-1868