They are trying to use the FED to legislate morality and that never works and never will. No matter how hard they clamp down someone, somewhere will be able to get away with it.
The whole contention as I understand it was based on a fear that kids are being exposed to porn because the hotels have pay per view porn.
Any rational person who understands the principles of individual freedom and accountability knows dragging the FED into this sort of thing is a veiled attempt at using government force to impose thier morality. Kids watching porn is not at the level of a crisis even if it happens every once in a while and certainly doesn't warrant the expense incurred by a national FBI inventigation. We have more pressing matters for our federal government to attend to.
Based on the quote you posted they were trying to use the FED to enforce existing legislation. That's a very different thing.
I have been in rooms where cable access channels had pornographic material available without any access restriction whatsoever. Granted this was at 2:00 am. I would not put it past many children to be up at that hour watching TV while their parents sleep.
That said, I agree with you for the most part. Pay per view is a private agreement between the traveller and the hotel owner and there is nothing but trouble trying to legislate this. Since I haven't read the laws being discussed I can't comment on whether what FoTF and the others are trying to do falls into this category or not.
I will also say that I would not be unhappy if the hotel owners of America decided they didn't want to provide ppv smut and people who REALLY wanted to view it could not get access anywhere but at hotels that charge by the hour. America is not best served where every vice that interests a man is catered to. But I would not want to see laws banning same.
Shalom.