We have discussed this before and JR has given his opinion that the bottom of the ball must clear the top of the ring for the violation to have occurred.
It seems to be a grey area though as it is unclear from the rules whether the ball must clear the net on its way up and out. The case book doesn't address this at all. Rule 9-4 states the ball must "enter and pass through the basket" and we know from 1-10-1 that the net is part of the basket. So when I first encountered this rule, I thought that if the ball didn't come entirely out of the net then it wasn't a violation. Now I am with JR, since according to 1-10-1 the net must be "suspended from beneath the ring." If the net is being pushed up above the level of the ring (10') by the ball or is caught around the rim, I am of the opinion that it shouldn't be considered part of the basket.
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