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It's known as the "restricted area," and it's designed to help distinguish between charging versus blocking calls underneath the basket. The short version is that if a defensive player is within the restricted area when contact is made, no foul should be called on the offensive player. The longer version (from http://www.nba.com/analysis/rules_c.html?): An offensive foul should never be called if the contact is with a secondary defensive player who has established a defensive position within a designated "restricted area" near the basket for the purpose of drawing an offensive foul. The "restricted area" for this purpose is the area bounded by an arc with a 4-foot radius measured from the middle of the basket. EXCEPTION: Any player may be legally positioned within the "restricted area" if the offensive player receives the ball within the Lower Defensive Box.
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