Edge Broadcasting Company owns a radio station in Moyock, North Carolina. Moyock is approximately three miles from the border between North Carolina and Virginia, and 92.2% of the station's audience lives in Virginia. Virginia allows state-run lotteries; North Carolina does not. The Federal Communications Act, 18 U.S.C. _ 1304, prohibits television and radio stations operating in non-lottery states from broadcasting lottery advertisements. Edge challenged the constitutionality of this prohibition, at least as the prohibition was applied to Edge. A federal district court in Virginia ruled in Edge's favor, holding that the prohibition was ineffective in shielding North Carolina residents from lottery advertising. The Fourth Circuit Court of Appeals affirmed. In Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), the U.S. Supreme Court for the first time recognized that commercial speech speech that concerns only commercial or economic activity is entitled to some First Amendment protection. The government therefore may regulate commercial speech only if it is false or misleading or if the restriction directly and narrowly advances a substantial state interest. Central Hudson Gas & Elec. v. Public Serv. Comm. of N.Y., 447 U.S. 557 (1978).

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