The February 2004 incident drew more than 500,000 complaints
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Upholding the fine for Janet Jackson's breast exposure during the 2004 Super Bowl will effectively censor US television, it has been claimed.
Robert Corn-Revere, lawyer for the CBS network, told a US appeal court that the fine has already had a "profoundly censorious effect" on US broadcasters.
CBS said the incident was "unscripted, unauthorised and unintended".
A ruling on whether the $550,000 (£270,854) fine will be overturned is expected in the next few months.
The 3rd US Circuit Court of Appeals in Philadelphia will decide if the Federal Communications Commission was right to impose the penalty.
The Federal Communications Commission (FCC), which imposed the fine, contends that the broadcast "violated longstanding prohibitions".
Biggest fine
CBS asserts that it should not be fined for broadcasting "fleeting, isolated or unintended" controversial images.
FCC lawyer, Eric Miller, defended their decision that the show was indecent because it contained a "highly sexualised performance" even before Jackson's breast was exposed.
He argued that CBS had been "wilful" in its broadcast because it had failed to guard against indecency.
"CBS was indifferent to the fact that an obvious risk can constitute a deliberate omission," added Mr Miller.
The incident, which prompted more than 500,000 complaints, was famously attributed to "a wardrobe malfunction" by singer Justin Timberlake, Jackson's partner on stage.
The case CBS has brought against the FCC is one of a series of challenges made against its indecency regulations.
If the fine is upheld, it will be the largest ever levied against a US TV broadcaster.
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