"...But the FCC rejected that, saying buttocks qualifies as both sexual and excretory."

From ABC's affiliate in Maine:

Bare Rear Could Cost ABC Stations $1.4M

The FCC defines indecent content as depicting or describing "sexual or excretory activities" in a "patently offensive way." ABC argued that "the buttocks are not a sexual organ." But the agency rejected that, saying buttocks qualifies as both sexual and excretory.

So basically, the FCC had to argue what?

Ladies and gentlemen, Bill Moyers on the man who knows everything an ass is meant to do because he is one, FCC Chairman Kevin J. Martin.