The judges ruled 3-0, striking down the CDA as unconstitutional. The next step is probably an appeal to the Supreme Court.
It looks like these judges have reached a very good understanding of how the Net works, and the issues involved. Here is an excerpt from the panel's Finding's of Fact (80-81):
It is no exaggeration to conclude that the Internet has achieved, and continues to achieve, the most participatory marketplace of mass speech that this country -- and indeed the world -- has yet seen.... Indeed, the Government's asserted "failure" of the Internet rests on the implicit premise that too much speech occurs in that medium, and that speech there is too available to the participants. This is exactly the benefit of Internet communication, however. The Government, therefore, implicitly asks this court to limit both the amount of speech on the Internet and the availability of that speech. This argument is profoundly repugnant to First Amendment principles.
Some of the dialogue on the Internet surely tests the limits of conventional discourse. Speech on the Internet can be unfiltered, unpolished, and unconventional, even emotionally charged, sexually explicit, and vulgar -- in a word, 'indecent' in many communities. But we should expect such speech to occur in a medium in which citizens from all walks of life have a voice. We should also protect the autonomy that such a medium confers to ordinary people as well as media magnates.
Moreover, the CDA will almost certainly fail to accomplish the Government's interest in shielding children from pornography on the Internet. Nearly half of Internet communications originate outside the United States, and some percentage of that figure represents pornography. Pornography from, say, Amsterdam will be no less appealing to a child on the Internet than pornography from New York City, and residents of Amsterdam have little incentive to comply with the CDA.
The diversity of the content will necessarily diminish as a result [of the CDA]. The economic costs associated with compliance with the Act will drive from the Internet speakers whose content falls within the zone of possible prosecution. Many Web sites, newsgroups, and chat rooms will shut down, since users cannot discern the age of other participants. In this respect, the Internet would ultimately come to mirror broadcasting and print, with messages tailored to a mainstream society from speakers who could be sure that their message was likely decent in every community in the country.
Even if a broad search will, on occasion, retrieve unwanted materials, the user virtually always receives some warning of its content, significantly reducing the element of surprise or 'assault' involved in broadcasting. Therefore, it is highly unlikely that a very young child will be randomly 'surfing' the Web and come across 'indecent' or 'patently offensive' material.
The Supreme Court has held that 'minors are entitled to a significant measure of First Amendment protection, and only in relatively narrow and well-defined circumstances may government bar public dissemination of protected materials to them.' Erznoznik v. City of Jacksonville, 422 U.S. 205, 212-213 (1975)(citations omitted).
But the bottom line is that the First Amendment should not be interpreted to require us to entrust the protection it affords to the judgment of prosecutors. Prosecutors come and go. Even federal judges are limited to life tenure. The First Amendment remains to give protection to future generations as well. I have no hesitancy in concluding that it is likely that plaintiffs will prevail on the merits of their argument that the challenged provisions of the CDA are facially invalid under both the First and Fifth Amendments.
The fundamental constitutional principle that concerns me is one of simple fairness, and that is absent in the CDA. The Government initially argues that "indecent" in this statute is the same as "patently offensive." I do not agree that a facial reading of this statute supports that conclusion. The CDA does not define the term "indecent," and the FCC has not promulgated regulations defining indecency in the medium of cyberspace.
Contrary to the Government's suggestion, Pacifica does not answer the question of whether the terms pass constitutional muster in the present case. In Pacifica, the Court did not consider a vagueness challenge to the term "indecent," but considered only whether the Government had the authority to regulate the particular broadcast at issue -- George Carlin's Monologue entitled "Filthy Words." In finding in the affirmative, the Court emphasized that its narrow holding applied only to broadcasting, which is "uniquely accessible to children, even those too young to read." 438 U.S. at 749. Thus, while the Court sanctioned the FCC's time restrictions on a radio program that repeatedly used vulgar language, the Supreme Court did not hold that use of the term "indecent" in a statute applied to other media, particularly a criminal statute, would be on safe constitutional ground.