FEC Proposal on Internet Rules Draws Divergent Interpretations

An initial FEC judgment that the Internet is the same, from a regulatory perspective, as billboards or TV ads, yielded to a near-total exemption in FEC’s later interpretation of the 2002 Bipartisan Campaign Reform Act (BCRA), said Ken Gross, a former FEC assoc. gen. counsel. He said the Commission’s continuing legal fight with BCRA sponsors -- and loss at the district court level (WID Sept. 21, 2004 p1) -- has given the FEC a more nuanced view of the Internet’s place in campaigns.

Gross outlined the NPRM’s notable elements: (1) Extending the term “public communications” to paid ads on 3rd-party websites. The NPRM asks whether this rule also should apply to roughly equal exchanges of advertising. (2) Requiring disclosure by people placing such ads, which Gross said “isn’t that big of a deal.” (3) Changing the “500 rule” -- requiring disclaimers on e-mail messages to 500 or more recipients -- so it applies only to purchased e-mail lists. (4) Expanding the news-media exemption to websites with no offline counterparts; the FEC wonders whether all bloggers should be exempt as well. (5) Excluding certain expenses -- such as personal computer equipment and Internet access -- from the “contribution” and “expenditure” definitions. The FEC also is asking whether campaigns should have to disclose payments to bloggers to advocate for them, “not [to express] a homegrown opinion,” Gross said. One complication is that some bloggers already have been paid as consultants, sidestepping BCRA’s communications focus: “You can’t stop from lawyering these things before the ink dries,” Gross said. Comments are due June 3 on the NPRM, also the subject of Commission hearings June 28-29.

“I can’t perceive any intention by the Commission” to fully extend traditional campaign finance regulation to the Internet, said Don Simon. The Internet’s “leveling effect” lessens big-money influence in politics, but that doesn’t preclude well-funded interests from trying to dominate the online sphere, which means some offline regulations should remain online, said Simon, a former Common Cause pres. IPDI Dir. Carol Darr said the FEC commissioners weren’t trying to add new requirements to online activity, but to educate online activists on rules they already must follow. Many loopholes in campaign finance law weren’t exploited in the 2004 election, Darr said, because broadband penetration wasn’t sufficient for video and audio to see extensive use in online campaigning, she said. “All this will change in the next election,” though. “Frankly there’s great ignorance throughout the government” on the Internet’s technicalities and difficulties inherent in regulating it, Center for Democracy & Technology (CDT) counsel John Morris said. The good thing for online activists is that FEC Chmn. Scott Thomas recognizes his ignorance, telling Morris recently the commission wants to be educated by the activists, he added.

“It’s not really the FEC’s fault” it’s drawing fire for squelching speech, since it’s only responding to the U.S. Dist. Court, D.C., and Congress, said Robert Bauer, counsel to the Democratic House and Senate campaign committees. Nonetheless, “it’s a trap to believe [the NPRM is] narrow.” The question of harm from required disclosure for campaign involvement “causes my blood to boil,” Bauer said. “Once the tent flap is lifted” and individuals and groups must disclose online campaign involvement, financial or otherwise, there’s little to stop the govt. from adding an endless stream of new regulations, he said. A court just dismissed claims Vice President Cheney should have to identify participants in his private meetings on energy policy, he noted, asking why online campaign communications should be treated so differently. Fortunately, “The immense power of Internet citizen activity” makes Congress nervous about extending such regulations, Bauer said.

The ideological divide between FEC commissioners and staff on Internet policy came into question. RedState.org blogger Mike Kremapsky noted the only exemption from traditional regulations for Internet communications in the FEC gen. counsel’s leaked draft proposal -- a hot-button issue for bloggers -- was for websites with less than 500 visitors monthly. Gross said in his time at the FEC the staff had much more influence, but now commissioners have much stronger views: “You can take some solace in that.” Simon said the draft report is a “straw man... used to gin up hysteria, not a real document.” He noted the last 2 pages of the NPRM, which give the specific rules, contain only one new regulatory recommendation, which “should give people with your concern a lot of comfort.” Bauer said FEC staff make most day-to-day decisions -- such as enforcement -- which commissioners have “very, very little control over” and bloggers will get hauled into the gen. counsel’s office for perceived violations, a claim Gross seconded. A bigger problem may be the way the proposal leaves the FEC open to take a case-by-case approach to online campaign disputes, leading to “endless lawyering,” Bauer said.

Audience members peppered panelists with hypotheticals, asking in which cases bloggers might face traditional campaign regulations. Krempasky, who’s to speak May 16 at the annual Personal Democracy Forum on technology and politics, started a long colloquy about when blogger activities would cross over into political committee regulations. Bauer noted much discussion to that point focused on “independent” campaign activities, lamenting: “The right of association is virtually a dead letter in campaign finance [law],” which only “promises protection if you keep to yourself.” He asked Gross if he thinks the current proposal would shield bloggers banding together to raise money collected into an account they control, for a candidate. Gross replied with a laugh that the FEC “favors form over substance,” meaning in this instance the fact that they joined together probably would subject them to regulation. Gross answered the same to a question about a group of bloggers soliciting money that goes directly to a candidate. However, the issue of coordination “is still up in the air,” Gross cautioned, responding to a question about campaigns sending “marching orders” to a mass e-mail list that happened to include friendly bloggers.

Every piece of campaign legislation promises to solve some problem definitively, Bauer said: “I think we're going to rue the day we went down this road.” Gross said regulation itself is incremental. But, he added, considering the vehemence of a debate on the topic among 3 lawyers specializing in campaign finance regulations, the rules need to be far more explicit “so [an FEC] staffer 6 years from now doesn’t interpret it differently” than those currently serving.

The event also highlighted a new FEC section on the CDT site. Organized in collaboration with IPDI, the section analyzes the NPRM and endorses a largely hands-off and technology-neutral approach to online campaign regulation -- http://fec.cdt.org.