(FORTUNE Magazine) – If you are more than about 45 years old, you probably can't forget when you first heard a 1972 monologue by comedian George Carlin titled "Seven Words You Can Never Say on Television." Ordinarily we wouldn't print the seven words in question, but they're too central to this story to omit. (If you're offended by this kind of thing you might want to skip this article altogether.) Here's Carlin's list, in his now canonical order (and run-on enunciation): "shitpissfuckcuntcocksuckermotherfuckertits."

What you may not know is that Carlin's skit is also the starting point for all discussions of broadcast decency law. That's because in 1973 a New York City public radio station owned by Pacifica Foundation aired an expanded version of the Carlin skit at two in the afternoon, prompting the Federal Communications Commission to cite the station for violating a 1927 law that bars the utterance of "indecent" language over the airwaves. Pacifica sued, protesting that any regulation of indecency by the government violated the First Amendment. In 1978 the case reached the U.S. Supreme Court, which, after studying a transcript of Carlin's skit, upheld the FCC's finding, but by a bare 5-4 vote. And since no rationale for the ruling commanded the support of a majority of the Justices, lawyers were left in the dark about precisely what the ruling meant.

Much has changed since 1978: the composition of the Supreme Court, social mores, and most important, technology. Most of us now receive scores if not hundreds of channels piped into our homes via coaxial cable or satellite. Only a tiny fraction of them--the handful that are still also literally broadcast from a transmission tower somewhere--are subject to the FCC's decency rules. And, of course, there's an Internet now, which children explore more confidently than their parents and on which decency is more the exception than the rule. Yet in 1997 the U.S. Supreme Court struck down as unconstitutional a congressional attempt to impose decency standards on the Internet. All those developments raise a serious question about whether the Pacifica holding is still good law.

We may soon find out. Two federal appeals courts are now grappling with the most important broadcast decency cases since Pacifica. Each arose from the FCC's decision, in March 2004, to discard 30 years of self-restraint in order to crack down on the rising incidence of indecency on television. If the courts decide either case on broad constitutional grounds, U.S. Supreme Court review would probably be sought and, some experts think, granted.

That's where the crackdown will either prevail or backfire--bigtime.

Indecency is different from obscenity. Obscenity can be regulated, since courts have held that it is unprotected by the First Amendment. But the mere recitation of dirty words does not meet the Supreme Court's definition of obscenity, which requires not only extremely raw depiction or description of sex acts but also a context that "lacks serious literary, artistic, political, or scientific value."

In contrast, mere indecency is a notch less offensive than obscenity, and it can occur in works that have unquestionable social value. For both reasons, it retains some degree of First Amendment protection. Accordingly, the FCC was wary of regulating indecency at all before the Pacifica case. Nor was it frequently called upon to do so, since broadcasters didn't want to offend viewers or sponsors. Even in Pacifica the FCC imposed no fine, citing the murkiness of the rules and the rarity of their enforcement until then. After the Supreme Court upheld the FCC's wrist slap, most lawyers interpreted its ruling this way: The government could regulate decency on broadcast TV because it was a "uniquely pervasive presence in the lives of all Americans" and "uniquely accessible to children." Nevertheless, while the FCC could punish a barrage of swear words at an hour when children were likely to be listening--"verbal shock treatment"--it probably could not punish the mere "isolated use of a potentially offensive word."

Immediately after Pacifica the FCC essentially adopted Carlin's definition of indecency--to be "indecent," an utterance had to involve at least one of his seven words. In 1987 it crafted a more generic definition: words or images that "describe or depict sexual or excretory organs or activities" in a way that is "patently offensive to contemporary community standards for the broadcast medium." Still, the FCC interpreted that definition narrowly.

Over time the television networks' internal codes of decency became less stringent, either because society's mores were relaxing or because sponsors were discovering that Anglo-Saxon vulgarities appealed to the spendthrift l8- to 34-year-old demographic, which considered them "edgy." By the late 1990s watchdog groups like the Parents Television Council and Morality in Media had formed. They were disturbed by what Howard Stern was getting away with on the radio and alarmed by the rising use of coarse language (the not-quite-dirty words like "bitch" and "ass") on primetime television, when millions of children were watching. When Internet technology arrived on the scene, these groups set up online complaint-filing pages: Irate parents could fill out a protest and click it straight to the FCC.

On the evening of Dec. 9, 2002, singer-songwriter Cher stoked the watchdogs' fury to a new level. She was presented with a Billboard Music artistic achievement award in a ceremony aired live by Fox affiliates between 8 and 10 P.M. Eastern time. In accepting, she said, "I've had critics for the last 40 years saying that I was on my way out every year, right? So fuck 'em." Fox was using a five-second audio delay, but its bleep-meister was slow on the draw.

Coincidentally--or not--a month later another uni-name rock star celebrated receipt of an award on live television in very similar fashion. Upon learning that he'd won the Golden Globe for Best Original Song, Bono exclaimed, "This is really, really, fucking brilliant." The show was broadcast by NBC affiliates, without tape delay. The FCC received 234 complaints about Bono's expletive, of which 217 (93%) came from people associated with the Parents Television Council.

"These were the most egregious uses we'd seen," says PTC president Tim Winter, "at least at those times of the day." (The FCC enforces decency standards only between 6 A.M. and 10 P.M. An attempt to impose them round the clock was struck down by a federal appeals court in 1991.)

While Winter's constituency was riled by the Cher and Bono incidents, what happened next left it enraged. On Oct. 3, 2003, the FCC Enforcement Bureau ruled on the complaints relating to the Bono incident--and rebuffed them. "The performer used the word 'fucking' as an adjective or expletive to emphasize an exclamation," the bureau wrote. He hadn't, therefore, literally described or depicted "sexual or excretory organs or activities … Moreover, we have previously found that fleeting and isolated remarks of this nature do not warrant commission action."

The bureau's rather jesuitical distinctions were widely ridiculed. "If the word 'f--k--g' does not describe sexual intercourse," asked a Morality in Media press release, "then what does it describe? Singing in the rain? Eating nuts? Picking flowers?"

Resolutions condemning the ruling were introduced in both houses of the U.S. Congress, and subcommittees of each chamber ordered the FCC commissioners to appear before them in February 2004.

But even before that happened, two more incidents occurred. The first was, again, at the Billboard Music Awards, though this time the celebrity, Nicole Richie, wasn't even an exuberant winner; she was a mere presenter. Helping her was Paris Hilton, her then co-star on Fox's reality show The Simple Life, about jet-set party girls who spend a month doing honest work on an Arkansas farm. Unlike Cher's or Bono's expletives, Richie's looked distinctly scripted.

Paris Hilton: Now Nicole, remember, this is a live show. Watch the bad language. Nicole Richie: Okay, God. Paris Hilton: It feels so good to be standing here tonight. Nicole Richie: Yeah, instead of standing in mud and [audio blocked]. Why do they even call it The Simple Life? Have you ever tried to get cowshit out of a Prada purse? It's not so fucking simple.

Fox's bleeper managed to nab the first expletive ("pig shit"), but he couldn't catch the next two because they came so fast and furious. Fox had had no idea Richie would swear, its lawyers later explained, since the prepared text called for her to say only, "Yeah--instead of standing in pig crap. Have you ever tried to get cow manure out of a Prada purse? It's not so freaking simple." Hmm.

"This was a setup!" says Winter of the Parents Television Council. It was also the second Billboard Awards show in a row at which Fox's bleeper system had proved inadequate to the simple task at hand. "They're on notice," he says of Fox. "The turd is in their pocket!" (Refreshingly, Winter does not shy away from using expletives when speaking to an adult reporter.)

The Richie incident does draw attention to a murky issue that the courts have not yet resolved. If a broadcaster airs something "indecent," must it do so knowingly to be liable? Or is negligent failure to prevent transmission enough?

A scant two months later came the last straw: the Wardrobe Malfunction. CBS's broadcast of Super Bowl XXXVIII attracted an average viewership of 89.8 million, making it the highest-rated show of the season. The halftime show, produced by Viacom's MTV, was thoroughly raunchy even aside from the alleged mishap, filled with groin-grabbing rappers and single-entendre lyrics, like Janet Jackson's ode to a man's crotch: "Got a nice package alright. Guess I'm gonna have to ride it tonight."

"Everyone at CBS and everyone at MTV was shocked and appalled by what transpired," Viacom president and COO Mel Karmazin solemnly told a House subcommittee ten days later. (He was referring only to the breast exposure, though; everything else had gone as rehearsed.)

The FCC commissioners were also on the defensive at the hearing, openly tipping their hand that broadcast decency rules were about to undergo an extreme makeover.

That came a month later, when the commission not only overturned the Enforcement Bureau's ruling in the Bono case but also announced a clean break with the past.

"Given the core meaning of the 'F-word,'" the FCC wrote, "any use of that word or a variation, in any context, inherently has a sexual connotation." The commissioners also put an end to the "fleeting and isolated expletives doctrine"--the notion that a single, isolated dirty word would not ordinarily be sanctionable.

Predictably, as soon as the bold new policy was adopted, fresh eyeball-rolling began--but now it was directed at those enforcing the crackdown. On the first Veterans Day following the ruling, ABC broadcast Saving Private Ryan, prompting a flurry of complaints to the FCC about the soldiers' use of "fuck" and "shit." Well, explained the FCC, backpedaling already, those particular "fucks" and "shits" were okay, because deleting them "would have altered the nature of the artistic work and diminished the power, realism, and immediacy of the film experience for viewers."

Then viewers complained about the "fucks" and "shits" in a PBS documentary directed by Martin Scorsese called The Blues: Godfathers and Sons. The aging musicians in the film salted their speech with those words. Inexplicably the FCC now came out the other way: Those "fucks" and "shits" did violate the rules, the FCC concluded, because the educational purposes of the documentary "could have been fulfilled and all viewpoints expressed without the repeated broadcast of expletives." It began to look as though the five unelected FCC commissioners were imposing their subjective tastes on the nation.

When the fifth anniversary of 9/11 rolled around last fall, CBS decided to re-air a Peabody Award-winning documentary about the attack. But this time, CBS claims, about 10% of its affiliates bowed out, fearful that the firefighters' use of expletives in the film might violate the FCC's new rule, subjecting them to fines. (In 2006, Congress increased the maximum fines for indecency from $32,500 to $325,000, and since the fines can be imposed separately for each expletive and each affiliate, they can mount up. A network, if it reimburses its affiliates, could theoretically owe $65 million per "shit.")

The propriety of the FCC's sanctions against Fox for failing to have intercepted Cher's and Richie's expletives was argued before a federal appeals panel in Manhattan last December. (The court has not yet ruled, and could any day.) Since the 10 A.M. argument was being televised live by the cable station C-SPAN, the judges soon began wondering about the decency of airing a legal argument on indecency. At the argument, after all, the Fox lawyer and the judges were repeatedly saying "fuck" and "shit." (The FCC lawyer primly referred only to "the F-word" and "the S-word.")

"Suppose they pick up a portion of [the] argument and broadcast it over the six o'clock news tonight," Judge Peter Hall asked FCC lawyer Eric Miller. "Say they pull up clips from the Billboard Music Awards and show those two incidents as background to the news broadcast."

FCC attorney Miller said that in that context, the clips would no longer be offensive or sanctionable, because they wouldn't be being presented to pander or titillate. "Context is all-important," he argued.

"But does context make a difference to a child?" interjected Judge Rosemary Pooler, whose question went unanswered.

If the case does reach the Supreme Court, Winter of the Parents Television Council says he's confident that Pacifica will be reaffirmed. He stresses that broadcasters get their frequency bands free from the federal government, in contrast to, say, cellphone companies, which pay billions to acquire spectrum at public auction. The government is giving them an incredibly sweet deal, Winter says. It's saying, "I'll use public resources to deliver your product free of charge to every human being in the country, and in exchange you have to promise not to air indecent material before ten." Yet broadcasters aren't living up to their piddling end of the bargain.

For what it's worth, the pro-regulation perspective seems to have broad bipartisan backing in Congress and, presumably, in the heartland. As one Congressman put it at a subcommittee hearing in February 2004, "We're mad as h-e-l-l, and we aren't going to take it anymore!" feedback rparloff@fortunemail.com

DIRT DOCKET

NYPD BLUE In 2006 the FCC ruled that Sipowitz's uses of "bullshit" were indecent. Ruling later retracted.

THE EARLY SHOW In a live interview, one Survivor contestant called another a "bullshitter." No fine; it was "news."

THE SIMPSONS In 2004, Smithers visited a strip club. No fine: "No cartoon character is shown completely nude."