A U.S. law banning public radio and TV stations from running paid ads for corporations and political candidates has been upheld by a federal appeals court.

The U.S. Court of Appeals in San Francisco said in a 9-2 ruling Monday that the government has a substantial interest in imposing advertising restrictions to "preserve the essence of public broadcast programming."

"In a classic case of 'follow the money,' Congress recognized that advertising would change the character of public broadcast programming and undermine the intended distinction between commercial and noncommercial broadcasting," the court's majority said.

The ruling reverses a 2-1 decision last year by a three-judge panel of the court. The panel had struck down the law as unconstitutional.

The court ruled in a lawsuit brought by Minority Television Project Inc., a California nonprofit group that operates the public television station KMTP. The station, based in Palo Alto, Calif., was fined by the Federal Communications Commission after another broadcaster complained about its its underwriting announcements on behalf of marketers such as Chevrolet, Ford and Korean Airlines.

The station sued the FCC, claiming the ban on ads violated its right to free speech.

~ Bloomberg News ~