Civil rights advocates and 15 Internet businesses filed a federal lawsuit yesterday challenging the constitutionality of a new Virginia law that seeks to ban from the Internet commercial material that could be considered harmful to juveniles.

The lawsuit, which names Virginia Gov. James S. Gilmore III and Attorney General Mark L. Earley as defendants, was filed by companies, authors and the nonprofit group People for the American Way. It alleges that to comply with the law, Internet users and businesses "will be obliged to self-censor their speech, thus reducing the adult population in cyberspace to reading and communicating only material that is suitable for juveniles."

Larry Ottinger, a lawyer for People for the American Way, said yesterday that by trying to shield children from potentially harmful material, the law would effectively censor the free exchange of ideas that exists on the Internet.

"The law is ineffective and harmful to business and the development of this medium," Ottinger said. "It threatens the public's ability to communicate and to receive valuable information on the Internet about health, the arts, literature and through conversations that go back and forth between friends."

A spokesman for the attorney general's office said that officials could not comment because their office may be involved in this pending litigation.

The Virginia General Assembly enacted the law April 7 over the objections of Gilmore, who tried to delay its consideration for a year, a spokeswoman for the governor's office said.

Officials say no one has been charged under the law, which went into effect July 1. The misdemeanor carries penalties of up to 12 months in jail and a fine of up to $2,500.

Del. Robert G. Marshall (R-Prince William), who sponsored the bill, said it was carefully crafted to target a narrow audience--those who sell pornography to children--and he criticized assertions that the law is not constitutional.

The law, he said, goes after the "commercial transaction where a pornographer is selling for money certain material that's harmful to minors and he's using the Internet or e-mail or selling CD-ROMs, which otherwise are legal in the absence of a statute," Marshall said. "You can give this garbage away and you're not going to be prosecuted. If you sell it, that's when you run into problems."

The law makes it a crime to knowingly sell, rent or loan to a juvenile electronic files or messages containing an image "which depicts sexually explicit nudity, sexual conduct or sadomasochistic abuse and which is harmful to juveniles." The law also bars displaying such material for commercial purposes in a way that juveniles can "examine and peruse" it. The law also applies to verbal descriptions or narrative accounts of sex that could be damaging to children.

Plaintiffs in the lawsuit include a wide range of businesses, advocates of free speech and authors. They include: Herndon-based PSINet Inc., one of the world's largest providers of Internet-related services; author Harlan Ellison; the Comic Book Legal Defense Fund; Lambda Rising Bookstores, the nation's largest specialty retailer of gay and lesbian materials; and the Sexual Health Network, an Internet-based company that provides sex education materials for people with disabilities or chronic illness.

John LoGalbo, an attorney for PSINet, said the law places Internet service providers in an "impossible" situation in which they're faced with censoring the materials put online by their customers or risking prosecution.

"Virginia is attempting to tell people all over the world what they can and cannot put on the Internet," LoGalbo said. "The Virginia law is a top-down, government-knows-best approach. Even if that was the right way, it won't work. You can't control what people all over the world place on the Internet."

The lawsuit argues that parents and other Internet users can use software on their computers to restrict children's access to pornographic and other online sites they consider unsuitable.