FEC Takes First Stab at Internet Rules: More Clarity Needed

By Richard Hasen, 03/24/2005 - 10:57am

At first glance, the Federal Election Commission’s draft proposal for regulating Internet-based election activity is good news for the blogosphere. Contrary to the blogstorm of fears that it would take a heavy hand, the FEC seems to understand that this is a different medium where speech is cheap and the need for regulation aimed at constraining the corrupting effects of big money is slight. However, the FEC’s first stab at writing new rules raises as many questions as it seeks to answer, and we must remain wary of both intended and especially unintended consequences.

The FEC entered this mess reluctantly, only after a federal district court rejected its earlier attempt to exempt most Internet activities from its regulatory reach. Yesterday its staff released draft regulations tackling the subject which the six commissioners are likely to approve at today’s meeting. After approval, the regulations will be printed in the Federal Register, opening up a 60-day comment period, followed by a further FEC hearing and adoption of final regulations.

If history is any guide, the final approved regulations could differ in significant respects from the current draft, and aggrieved parties may challenge the final regulations in court (which is what got the FEC to this point in the first place)—if Congress doesn’t act first to provide a broad exemption for Internet-based election activity. So we are far from having these rules on the books. But examining the draft is useful in seeing the direction that the FEC likely will take, and the questions that remain open.

FEC Intent: Limited Internet Regulation

There’s little question to a reader of the draft regulations that the FEC’s intent is to use a light hand in dealing with Internet-based political activity. Responding to the federal district court opinion that led to this rulemaking, the FEC’s main regulatory change would treat paid web-based campaign advertisements such as pop-up and banner advertisements under the same rules (regarding disclosure and permissible sources of funds for such ads) that apply to advertisements appearing off-line. Even here, however, the FEC treads lightly, at this point questioning whether it should treat an “announcement” on a website that is paid for by a candidate or campaign the same as a web-based campaign advertisement.

Indeed, much of the FEC’s draft seeks to limit regulation of the Internet. Even for paid advertising on websites that would otherwise be subject to regulation, the FEC is looking for alternatives to usual burdensome disclosure rules that require detailed information to accompany paid election-related advertising: “The Commission notes that with respect to most Internet websites and blogs, the burden of complying with the disclosure requirement, and the resources needed for the Commission to monitor such a requirement could outweigh the value of disclosure.” In a similar spirit, the FEC would not even require bloggers to disclose that they were paid significant fees by candidates or campaigns to promote or oppose a candidate for federal office.

Similarly, the Commission draft confirms (contrary to FEC Commissioner Smith’s hyperbole) that merely linking to a candidate’s website, and republishing campaign materials on a website or through e-mail, when done without payment, would not constitute a contribution to a campaign triggering reporting requirements. Perhaps even more significantly, the FEC would extend the media exemption. The current exemption does not treat news articles and commentaries such as those appearing in the Los Angeles Times or on CNN as an improper corporate election-related expenditure. The FEC would extend the exemption to online journals such as Slate and perhaps to bloggers as well.

FEC Execution: Unclear Internet Regulation

In some respects, the FEC’s first stab at regulation is too hands-off for my taste. I have argued in my previous article for PDF that “[f]or Armstrong Williams-like bloggers actually paid by campaigns or other political committees to promote or attack a candidate for federal office, prominent and on-the-spot disclosure should be mandated.” A disclosure on a campaign’s website in a quarterly report after the election deprives voters of valuable information about the possible motivations for an analysis or commentary appearing on a website.

But the greater danger of the FEC’s proposals, if enacted as they are, is the additional uncertainty that they would create. For example, consider someone who has a private website or blog that contains occasional political commentary. Suppose the blogger owns the site as a corporation. Corporations cannot engage in certain election-related activities except through a separate political action committee subject to numerous reporting and disclosure requirements. Can the blogger post commentaries calling for the election or defeat of a candidate for President? The draft rules extend the media exemption to news stories, commentaries and editorials appearing over the Internet, but written materials in this category must appear in a “newspaper, magazine or other periodical publication.” It is not clear that a blogger fits into this category, particularly if the blogger does not post regularly. [Editor's note: PDF contributing editor Michael Bassik adds his own analysis on this issue here.]

Similarly, what of a volunteer who has a website supporting a candidate for federal office, who maintains that website not just at home and at a public library, but also every day at lunch hour while working at a corporation? The FEC rules create a safe harbor for volunteer activity of this sort when conducted at home, when using personally-owned equipment, or when using equipment at a public place like a library. It is even permissible to use corporate-owned equipment, but only when the use is “occasional, isolated or incidental.” What of a professional who blogs regularly from work wants to engage in election advocacy on the blog?

The FEC will need to sort out these issues in the final set of rules. If the media exemption applies to all non-corporate bloggers, just who is a “blogger?” Perhaps this is just the FEC’s roundabout way of exempting the entire Internet (save paid advertisements and corporate web activities) from the scope of its review.

The corporate rules appear aimed at preventing evasion of the usual rules keeping corporations and unions out of political activity. But the rules appear to miss the reality of where, when, and how many bloggers conduct their activities—it is private activity conducted with the knowledge, but not necessarily the support, of the corporation. Will the scope of regulation turn on which computer a blogger happened to be at when writing a post calling for the defeat of a candidate for federal office?

Next Steps

Some bloggers have already started taking credit for the FEC’s apparent light stance on regulation. But there was little reason to believe that the FEC was really interested in regulating the Internet, Commissioner Brad Smith’s intentional blogstorm notwithstanding.

But bloggers have a crucial role to play at this point. Now that the FEC has entered into the fray, things could get worse before they get better. The law of unintended consequences has played itself out in campaign finance laws in the past. Bloggers and others need to go over the proposed regulations very carefully to examine what’s unclear, and what’s missing. The draft itself raises many questions, questions that the final set of regulations should answer clearly. Without clarity, you can bet that complaints will be filed at the FEC against the most successful partisan bloggers on both sides of the political aisle in 2006 or 2008.

Richard L. Hasen is a professor specializing in election law at Loyola Law School. He writes the Election Law Blog.


The Justification For Bradley Smith's "Blogstorm"

I agree that the proposed rules have been very "hands off" with respect to how the FEC plans to ultimately regulate online political activities. But I give them credit for indicating at least 47 times in the 47-page document that they welcome comment on literally every rule proposed. This seems to be a difficult territory for the FEC and I think they were just being overly cautious for fear of being too harsh or sparking another "blogstorm."

However, I've read a lot in the past few weeks about people's impressions of FEC Commissioner Bradley Smith.

He's been called an alarmist for suggesting a "coming crack-down" on blogging at the FEC and bloggers have been told we all over-reacted. The rules, as you point out, have been rather “light” on regulating political communication on the Internet.

But, if you take a look at the March 10th draft of the FEC's proposed rules, you'll see that if Bradley Smith hadn't raised his hand, we might be stuck with some really awful, Draconian rules, that could have quashed many forms of legitimate speech on the Internet.

Check out RedState.org's in-depth concersation about the March 10th rules.

C|NET News.com’s Declan McCullagh, who first broke the story about the FEC’s intentions to regulate blogging, noted that Thursday’s rules were likely “less regulatory than if FEC Commissioner Bradley Smith hadn't blown the whistle here earlier this month. In other words, the Internet outcry may have worked.”

In addition to only providing a 30-day comment period, the March 10th draft of the rules – circulated just one day before FEC Chairman Thomas spoke at the Politics Online conference where he was presented with Online Coalition’s letter - would have extended the definition of public communication well beyond paid advertising and would have also held the Internet to stricter reporting standards than any other medium.

I only wish Smith had spoken up earlier. Perhaps we could have convinced the Commission to have appealed the Federal Circuit Court's ruling before it was too late.

Regulate us Please

I am a pro-reform blogger who supports the regulations. I direct the non-profit, non-partisan watchdog TheRestofUs.org. Here is a copy of the comments we just filed at the FEC:

Regulate us, Please!

Mr. Brad Deutch
Assistant General Council
Federal Election Commission

Dear FEC:

As bloggers who care both about robust expression of political ideas on the Internet and the preservation of political equality that democratic self-government requires, we support the FEC’s draft proposal to regulate the use of big money to influence elections via the Internet and encourage you to strengthen these rules before finalizing them.

We have a blog. You can read it at www.fortherestofus.blogspot.com. We often mention federal candidates in the blog. We totally think that there should be regulations on the sort of thing we do. Here’s why.

In order for citizens to effectively govern ourselves, we collectively need to consider differing opinions from individual citizens. This theoretically happens in the town square, where anyone of us is free to step up on a soap box and tell all who will listen what we think is wrong with our society and what needs to be done to fix it. When we don’t individually have time to listen to every speech on every soapbox, we send someone to go in our place and report back if anything particularly important or interesting happens in the town square. These reporters become trusted news sources, historically known as the press.

The privatization of most public squares into shopping malls and big box stores has severely eroded our ability to speak freely to one another. The consolidation of traditional media outlets had reduced our options for hearing diverse opinions. Things were looking pretty bad for free speech among ordinary citizens.

But the Internet is changing that. It provides regular folks with the opportunity to stand on an electronic soap box that has a potential audience much larger than any public square. And, it provides us all the opportunity to act as reporters – to provide news coverage of issues that don’t get covered in the mainstream corporate media. It has the potential to level the playing field, so that every person’s voice is equally loud, regardless of how much money they have. This free flow of ideas then lets the public decide collectively which ideas we will support.

Sometimes citizens find that people aren’t interested in what they say from their soap box, or maybe just don’t know about it. Perhaps they don’t like how reporters are portraying their soap box speeches. They then introduce their ideas by paying money to interrupt information that viewers are seeking out with information that viewers otherwise would not be interested in. They buy ads.

Ads are paid speech - there is nothing free about them. They are, by design, an effort to bypass the marketplace of ideas, and communicate ideas that people would otherwise not choose to hear or would not hear with the same frequency as if ads were run.We’re not saying all ads are bad – indeed we have used Google’s adwords program to promote our site (type “527 group” into Google and see if we pop up.) But, unlike free speech, all citizens do not have an equal opportunity to engage in paid speech. Some people can buy more paid speech than others, a lot more.

Because paid speech is not equal, Americans have decided to place limits on paid speech that is used to influence election outcomes. Those limits aren’t nearly as strong as they ought to be, but they’re a start. The idea is that if one person uses a lot of money to get a candidate they support elected, that distorts the political marketplace. Elected officials then become beholden to the ideas of wealthy interests, and less interested in and less accountable to the rest of us. The system becomes corrupt.

The basic rules that ought to apply to speech on the Internet are:

A) As with other media like print, TV, and radio, corporations should not use money from their customers and shareholders to influence political elections unless those customers and shareholders voluntarily contribute into a corporation’s political committee. A corporation should not have its own website or e-mails that promote or attack candidates. A corporation should not pay others to have websites or e-mails that promote or attack candidates. An exception should be made for non-profit corporations so long as they don’t receive their funding from for-profit corporations, and for news corporations (see D below).

B) As with other media, there should be limits on how much individuals can contribute to influence political campaigns through paid advertising campaigns. These limits are ridiculously high in current law, but that’s a story for another day.

C) As with other media, when something is a paid ad, it should disclose that it’s a paid ad and tell who paid for it.

D) As with other media, there should be an exemption for legitimate news reporters who are not paid by anyone to report anything in particular and who viewers voluntarily subscribe to hear their reports. This should even be true of corporate media sources, like CBS, Fox, or the Daily Kos, so long as they don’t accept payment for their news reporting. This is free speech, not paid speech.

You guys and gals at the FEC don’t seem to get this. You seem to take every opportunity you can to encourage more paid speech by a few big donors, while doing nothing to promote free speech from the rest of us. So, when it was your job to implement the law that we collectively had passed through our elected representatives in Congress, you decided to exempt the Internet. Shame on you. Members of congress had to take you to court to force you to do your job. When the rest of us don’t do our jobs, we get fired. You guys just have to try again.

We are glad that you are trying again. We think you have come across the right concepts for regulating paid political speech on the Internet, but that you need some work on the details. Specifically:

1) Keeping free speech free. You seem to understand that most of the Internet is free speech, not paid speech. So, you are right to exempt most of the Internet from the definition of general public political advertising. But, you are correct to note that if someone pays a website to say something, then that is paid speech and should be considered political advertising. So, if our website, TheRestofUs.org, says from our soapbox that candidate Smith is an idiot, that’s free speech, not advertising. But, if someone pays us to put up an ad that says candidate Smith is an idiot, that’s political advertising and it should be subject to the same rules as all other political advertising. However, your definition is too narrow and seems to only focus on some forms that paid advertising could take, such as pop-up ads or streaming video. But if someone paid us to say nice thing about them in the text of our regular blog, that too is advertising – in a much more valuable form. You should not try to define a Blogger and should not exempt someone you define as a Blogger from anything. It’s just dumb to micromanage the techniques used by websites. The rule should be that if someone pays a website to post something that promotes or attacks a candidate, then it’s paid political advertising. If not, it’s not.

2) Disclaimers. You say that “with respect to most Internet websites and blogs, the burden of complying with a disclaimer requirement, and the resources needed for the Commission to monitor such a requirement could outweigh the value of disclosure.” We don’t think so. It would not be burdensome for any website to place a “paid for by XXXX committee” disclaimer either immediately above or below any paid political advertisement displayed on its site. The disclaimer should include a hyperlink to that political committee’s most recent electronic filing of its finances at the FEC that should contain the committee’s name, address, phone number, webpage, and list its contributions. It would be easy for the Commission to monitor this if it merely set up an electronic complaint box where members of the public or news media could report disclosure violations. The FEC could order web servers to take down any sites that do not contain appropriate disclosure after notification by the FEC that they need to do so. Again, you are making a mistake if you attempt to define bloggers and then exempt us from having to disclose if someone has paid us to say something on our blog.

3) Spam. We all hate spam, and wish we could ban it without infringing on free speech. But we can’t. Your approach is to require a political spammer to disclose their funding source if they send an unsolicited e-mail to more than 500 people on a list that they purchased from somebody. A better approach would be to require disclosure on any e-mail that is sent by a candidate, party, or political committee or by any third party that is paid to send an electioneering e-mail. As you suggest, if someone spends more than $250 spamming citizens with messages that promote or attack candidates, then they should have to register themselves as a political committee. However, e-mails sent to people who have requested them should not be considered spam and instead should be considered media reports.

4) An Internet media exemption. You ask whether Internet news sources should be subject to the same exceptions as TV, radio, and print news sources. We think it should. This is absolutely the best way that you can protect free speech for all of us, because almost anyone can then become a media source on the Internet. So long as they aren’t getting paid to do it, they should be able to say whatever the heck they want on their website. They should link to candidates’ websites, promote or attack candidates, etc. People can either visit it, or not. However, to the extent that a website pays someone else to promote its site and those promotions support or oppose a candidate, then those communications should be considered political advertising. So for instance, if our website posted something that said “Tom DeLay is a jerk, and we’d all be better off if he wasn’t in office,” that would be covered by the media exemption so long as nobody paid us to say this. But, if we paid other people to run ads on their websites that promoted our own website and if those ads attacked candidates, then those ads should not be covered by the media exemption. So, if we placed a Google adwords campaign in the week before an election that said “Tom DeLay is a jerk, visit our website to learn why…” those ads would be considered electioneering and would be subject to campaign rules.

Thank you for considering our public comment. While it’s important to be thoughtful about all this, common sense solutions are available that address both the concerns of bloggers and society’s interest in preventing powerful interests from using their wealth to dominate the public debate.

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