The Federal Communications Commission's indecency policy is unconstitutionally vague and could create a chilling effect beyond "fleeting expletives" heard on broadcasts, an appeals court ruled on Tuesday in a major win for broadcasting companies.

The ruling, by the U.S. Court of Appeals for the 2nd Circuit in New York, arose from a case involving Bono, frontman of the rock group U2, who used an expletive when he received an award during the live broadcast of the 2003 Golden Globe Awards.

News Corp's Fox Television, CBS Corp's CBS Broadcasting and others challenged an FCC ruling that on-air expletives that were not bleeped out were indecent and their use could be penalized.

A representative for the FCC, which regulates radio, television, wire, satellite and cable communications, could not immediately be reached for comment on the ruling.

The U.S. Supreme Court had weighed in on the case in 2009, ruling that the FCC had the authority to regulate profanity on the nation's air waves. The high court declined, however, to decide whether the FCC's policy violated First Amendment guarantees of free speech and returned the case to the Second Circuit for a decision on that aspect of the policy.

"We now hold that the FCC's policy violates the First Amendment because it is unconstitutionally vague, creating a chilling effect that goes far beyond the fleeting expletives at issue here," the panel of appeals court judges said in a written ruling on Tuesday.

The matter will return to the U.S. Supreme Court.

A Fox spokesman said the broadcaster was extremely pleased with the decision.

"While we will continue to strive to eliminate expletives from live broadcasts, the inherent challenges broadcasters face with live television, coupled with the human element required for monitoring, must allow for the unfortunate isolated instances where inappropriate language slips through," Fox said in a statement.

CBS declined immediate comment.

The three-judge panel wrote that after complaints were filed with the FCC over Bono's statement at the Golden Globe awards, the FCC declared for the first time that a single, nonliteral use of an expletive could be "actionably indecent."

The FCC had found that "the 'F-Word' is one of the most vulgar, graphic and explicit descriptions of sexual activity in the English language" and therefore "inherently has a sexual connotation." The FCC had overruled prior decisions on fleeting expletives.

An advocacy group, Media Access Project, which joined the lawsuit on behalf of writers, producers, directors and musicians, said the appeals court panel vindicated its argument that the FCC rules "are irredeemably vague and interfere with the creative process."

(Reporting by Jonathan Stempel, Grant McCool, Paul Thomasch and Diane Bartz; Editing by Robert MacMillan and Steve Orlofsky)

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