June 29 (Bloomberg) -- The U.S. Supreme Court, citing free- speech concerns, blocked a federal criminal law that would bar commercial Web sites from making pornography available to children.

The justices, voting 5-4, said the law may unduly restrict access by adults to material that is sexually suggestive, yet constitutionally protected. Justice Anthony M. Kennedy said an alternate approach, blocking and filtering software, may be a less restrictive and more effective way to limit youth access to online smut.

``Content-based prohibitions, enforced by severe criminal penalties, have the constant potential to be a repressive force in the lives and thoughts of a free people,'' Kennedy wrote for the majority.

The ruling, which returns the case to a lower court for trial, leaves open the possibility that the court ultimately will uphold the law, or some other approach Congress may adopt. The statute, aimed at what lawmakers say is the growing problem of easy access by children to lewd computer images, was a scaled-back version of a law the justices struck down in 1997.

``There are many less restrictive ways to protect children without sacrificing communication intended for adults,'' said Ann Beeson, attorney for the American Civil Liberties Union, which challenged the law. Today's action ``has made it safe for artists, sex educators, and Web publishers to communicate with adults about sexuality without risking jail time.''

`Common-Sense' Measures

Justice Department spokesman Mark Corallo criticized the court's ruling.

``Congress has repeatedly attempted to address this serious need and the Court yet again opposed these common-sense measures to protect America's children,'' Corallo said.

David Burt, spokesman for Secure Computing Corp., a maker of Internet security software based in San Jose, California, said there are an estimated 340 million pages containing pornography posted on the Internet from all sources worldwide. Shares of Secure Computing rose 24 cents to close at $11.74 in Nasdaq Stock Market trading.

The decision, and a separate one that put new limits on lawsuits against multinational companies, were the final rulings of the court's current term. The justices will issue orders in pending cases tomorrow before going on vacation.

Jay Sekulow, chief counsel of the American Center for Law and Justice, which supported the anti-pornography law in a court brief, said he was disappointed by today's ruling.

Six Months in Jail

``The Supreme Court missed an important opportunity to act now to protect our nation's young people,'' Sekulow said.

Northwestern University law professor John McGinnis predicted the government will have a difficult time persuading the lower court to uphold the law.

``It is probably a long shot,'' McGinnis said. ``They can try to prove these filters really aren't likely to be very effective.''

The 1998 Child Online Protection Act, which has never been enforced, would require commercial Web site operators who display pornography to screen out children by requiring a credit card number or adult access code. Violators would face up to six months in jail.

The law was challenged by the ACLU, Salon Media Group Inc., the Philadelphia Gay News and other organizations. Those groups say the measure would have a chilling effect on speech by creating a risk of a jail term even for putting non-obscene material online, such as information on obstetrics and gynecology, information on sales of books and photos and discussions about homosexuality.

`Self-Censor'

``Speakers may self-censor rather than risk the perils of trial,'' Kennedy's opinion said. ``There is a potential for extraordinary harm and a serious chill upon protected speech.''

Joining his opinion were Justices John Paul Stevens, David H. Souter, Clarence Thomas and Ruth Bader Ginsburg.

Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor, Antonin Scalia and Stephen G. Breyer dissented, saying the law is constitutional.

Breyer wrote for himself, Rehnquist and O'Connor that the law ``imposes a modest additional burden'' on adult access to material that is obscene and therefore not protected by the U.S. Constitution's First Amendment, and perhaps affects a ``limited class of borderline material'' as well.

`Technological Reality'

``It is always less restrictive to do nothing than to do something,'' Breyer wrote. In enacting the law, Congress sought to protect children without obstructing adult access to constitutionally protected material. ``What else was Congress supposed to do?'' he said.

The Bush administration defended the statute in court, saying such alternatives as filtering software had proven ineffective in shielding children from pornography.

Kennedy said a commission created by Congress in the Child Online Protection Act found that filtering software is more effective than age-verification requirements in keeping children from seeing online porn. Such software would screen out pornography posted from any location, while the law applies only to pornography posted to the Web from the U.S.

The district court said one witness estimated that 40 percent of such content comes from overseas, the justice said.

Kennedy also said sending the case back for trial will let the court consider ``current technological reality.'' He said the lower court decision was based on facts determined in 1999, and that better filtering software may exist now.

Lacks `Literary' Value

The statute would bar making available to children under age 17 material that appeals to ``prurient interest'' and ``lacks serious literary, artistic, political or scientific value for minors.''

The statute would apply to commercial Web sites that carry pornography in the ``regular course'' of business. E-mail, newsgroups and chat rooms would be exempted.

In 1997 the Supreme Court overturned a provision in the 1996 Communications Decency Act, an earlier congressional effort to bar dissemination of online pornography to children. That law applied to e-mail and chat rooms, as well as Web sites and wasn't restricted to commercial distributors.

Supporters of the law at issue today had hoped they had narrowed it enough to pass constitutional muster.

A federal appeals court barred enforcement of the statute last year, paving the way for the Bush administration's appeal to the nation's highest court.

The case is Ashcroft v. ACLU, 03-218.

To contact the reporter on this story: Laurie Asseo in Washington at lasseo1@bloomberg.net.

Last Updated: June 29, 2004 16:31 EDT