TV network CBS is fighting the $500,000 (£269,410) fine imposed on 20 of its stations after Janet Jackson's breast was exposed during the Super Bowl.
Jackson Super Bowl routine has gone down in TV history
The Federal Communications Commission (FCC) set the fine following an outcry over the singer's performance with Justin Timberlake in February.
CBS, which is owned by Viacom, said the FCC was wrong to conclude the incident was intentional.
Jackson blamed a "wardrobe malfunction", saying the exposure was an accident.
The FCC levied the maximum penalty for indecency, $27,500 (£14,829) against the individual stations, but chose not to fine the 200 affiliate stations that also broadcast the Super Bowl.
There were more than 542,000 complaints following Jackson's performance, which came at half time during the US' biggest televised sporting event.
CBS, in its appeal against the fine, said it recognised the crackdown on indecency and that the incident had become a "defining moment" in broadcast history but denied the fleeting exposure violated those standards.
It also argued that the fine violated the right to free speech and risked the entire future of live television.
"Something cannot be 'designed' without advance knowledge," it said in its reply.
"If it stands, the (proposed fine) will lead to the end of live broadcasting as we know it by placing broadcasters on notice that they risk massive liability and perhaps license revocation if they fail to adopt technical measures to avoid the possibility of a spontaneous transgression."
The $550,000 proposed fine for "an unplanned, fleeting exposure of a woman's breast is anything but a 'restrained' or 'cautious' approach to enforcement," the stations said.