Coulson, 46, faces up to two years in prison after he was found guilty last week of conspiring to intercept voicemails at the paper following a marathon trial at the Old Bailey, London.
In mitigation, his lawyer Timothy Langdale, QC, said: "Despite the seriousness, the facts of the case do not justify the maximum penalty."
He said it was clear from the trial Coulson was not alone in being ignorant of the fact phone hacking was illegal.
"There are some features of this sorry affair which must be mentioned because they are capable of having, we submit should have, a mitigating effect on any sentence.
"Perhaps the most salient factor of the evidence is that no one at the News Of The World or the newspaper industry at large in 2000/06 realised that interception of voicemail messages was illegal, in the sense of criminal."
He said the paper's own legal department, whom Coulson consulted frequently, never advised him it was a crime.
Mr Langdale said that after Coulson left the paper in 2007, he went on to be a "trustworthy and straightforward" director of communications for David Cameron, he said.
Prosecutor Andrew Edis, QC, disputed Mr Langdale's assertion that Coulson was unaware of the illegality of phone hacking, saying the evidence could not be clearer - he said Coulson knew from the summer of 2004, about the time he heard of the David Blunkett voicemail to Kimberly Quinn.
The lawyer said: "He knew at least from that date that it was a criminal offence."
The prosecution has also asked for £750,000 costs to be paid following the 139-day trial.