1. Miller test is the United States Supreme Court`s test designed for deciding whether the material will be labeled obscene or it will be protected by the First Amendment to the Constitution. Miller test was designed in 1973. It originates from the Miller vs. California case. This case is considered a landmark decision of the U.S. Supreme Court to redefine the definition of obscenity. Miller test comprises three parts (or conditions). If all three conditions are satisfied, the material is considered obscene. The average person finds that the material invokes prurient interest. It depicts sexual conduct in an offensive way. The material lacks serious artistic, scientific, or literary value.
2. The legal status of internet pornography is unsettled (the exception is child pornography). Accessing, creation, or distribution of pornography may be equated with prostitution. The government made several attempts to control adult film distribution on the Internet. The first try was made in 1996, when the federal government ordained Communications Decency Act. This act prohibited the transmission or publication of patently offensive materials. The Act was criticized by the Supreme Court as it violated the freedom of speech. The second attempt was Child Online Protection Act of 1998. It was abolished by the Supreme Court in 2004 since the act was too broad to be implemented within each community. To deny children access to online pornography, the government ordained the Children`s Internet Protection Act in 2000. It required using filtering software to prevent children from viewing materials which are considered “harmful to minors.” It is currently regulated under 18 U.S.C. 2257.

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3. Sexually oriented business must comply with the laws that impose restrictions not only on the content but also on all its participants. All actors must reach adulthood and be licensed. Licensing of sexually oriented business and its workers is a top priority to provide for their accountability. Licensing is carried out under strict schemes so to ensure that the freedom of speech is not violated. Licensed sexually oriented business pays fees and is responsible for zoning. The government imposes several regulations on the location of business. The main requirement is that it must be hidden. Certain regulations are also imposed on time when erotic content can be created.

4. The company can comply about the competitor`s ads according to the Lanham Act which prohibits false advertisement. The compliance can be sent to the Bureau of Competition of the Federal Trade Commission, an independent agency that ensures healthy competition within the country. This agency is also responsible for penalizing of false advertisers. DirecTV may be penalized for false advertising; nonetheless, the penalty cannot exceed $5,000. The organization will be penalized after the first conviction. The company must show the DirecTV`s assertion about its signal reliability, and picture quality should be ignored. The assertions about undisputable leadership and customers` satisfaction, the competitor`s assertion about its top quality (compared to other cable TV providers) will be taken into consideration as they may violate AAF code of ethics. DirecTV mainly complies with the AAF code of ethics. However, they do not comply with Principle 7. Their ad comprises information that cannot be substantiated by a reasonable basis. The DirecTV argument about the “outlandish” statement is not a valid defense. They stated that the ads are so exaggerated and outlandish that the consumers would not believe that these statements need to be substantiated. This claim violates the 7th principle of the AAF code of ethics. According to this principle, every statement that is made by advertisers must be substantiated. If the principle is violated, it means that the competitor`s conduct is unethical, and the regulatory agencies should address it.