Low Disclaimer Threshold, ‘Quantifying’ Website Content Questioned at FEC

By a wide margin, witnesses asked the FEC to delay rules until its appeal of Shays v. FEC plaintiffs’ legal standing is decided. Asked by Vice Chmn. Michael Toner if the FEC should wait for actual evidence of abuse or wrongdoing before regulating, Perkins Coie campaign lawyer Robert Bauer said it would be “extraordinarily helpful,” calling it preferable to “abstract policy debate… and hypothesized harm.”

It’s clear most in Congress had no intention of including the Internet in the Bipartisan Campaign Reform Act (BCRA), some witnesses said. A long list of included technologies omits the Internet, although AFL-CIO Assoc. Gen. Counsel Laurence Gold admitted it “would have been more helpful if… there had been specific proposals” to include the Internet that were later rejected. But when BCRA was adopted, the Internet already had become ubiquitous, making its omission glaring: “It’s one thing for the catchall [to have been] promulgated 20 years ago,” before consumers jumped on the Internet, Gold said.

The main change in the FEC proposal -- adding “paid advertisements on the Internet” to “public communications” -- would have “absolutely no consequences” for online activists, said Michael Bassik, who ran Kerry for President’s online ad operation. Bassik said 99% of paid political online ads already have disclaimers, and not a single state or local party organization has spent soft money online. Asked by FEC gen. counsel Lawrence Norton for evidence to back his claim about no online spending, Bassik said he studied comprehensive Nielsen data of ad impressions and checked with state and local parties when records seemed questionable. All told him only hard money was used online, he said.

The FEC has been regulating the Internet since 1995, unbeknownst to many bloggers, said Campaign Legal Center Pres. Trevor Potter. A former FEC commissioner, Potter said the issue of applying the media exemption has come up repeatedly at the FEC, even during the 2004 campaign, when some said documentary filmmakers should count.

The “means of communications should be valued at zero,” said OMB Watch counsel Karl Sandstrom, also a former commissioner. That would mean whatever an individual posts on his website or sends as e-mail would be exempt from FEC regulation. The FEC shouldn’t “fall into the trap of being too specific” by naming particular technologies, Bassik said, echoing DailyKos.com founder Markos Moulitsas’ warning the day before (WID June 29 p1).

Amateur campaign enthusiasts are at risk under today’s threshold for reporting and disclaimer requirements, Bassik said. Ads on blogs cost as little at $10 a week, and Google charges 10 cents per click. Bassik said a more realistic threshold would be just over $5,000, his estimate of the cost of running a banner ad campaign on a newspaper website or online portal. Disclaimers also should be required only on ads when practical -- not, for example, in Google text links or pages formatted for cell phone screens.

Asked by Comr. Bradley Smith whether a $200 statutory itemization threshold would be acceptable, Bassik called it “a bit low,” noting that a weeklong ad on DailyKos.com costs $200. Smith added that whatever the FEC does seems to get struck down in court, whether crafting a spending threshold for regulation or defining paid vs. unpaid ads. He said he is reluctant to create new regulations without a strong statutory basis. Bassik urged the FEC to ask Congress for a higher threshold. Smith also asked Potter if the FEC has authority to raise the threshold without going to Congress; voicing doubt, Potter said the Commission should have its counsel investigate further.

Smith then asked Potter if CLC would refrain from suing again if the FEC adopted online ad regulations, reopening an earlier spat between Potter and the FEC. Smith quoted Potter as “casting aspersions on my honesty” in describing what the proposed rules would do; Potter reined in his words slightly.

Chmn. Scott Thomas said no one has discussed the “awkward situation” of non-coordinated activities remaining regulated while individual coordination is exempt. Witnesses agreed any exemptions should extend to non-coordinated activities.

Unfair Treatment Among the Media

Bauer said he doesn’t think extending either exemption -- media or volunteer -- would protect individual or collective online speech for long. He echoed his own previous comments to the FEC (WID June 6 p2) in which he pressed the FEC for a “statement of policy” to prevent further tinkering with provisions. The Shays decision is the “first step toward a much longer and more painful journey,” Bauer said, and would make a large group of individuals reliant on the govt. for protection.

Some witnesses protested they are being held to a higher standard than commentators in other media. Comr. David Mason questioned Eschaton blogger Duncan Black’s written suggestion that the FEC treat compensation for posting editorial content and posting ads the same. “Nobody else in the media has to make those disclosures legally,” Black said, noting political consultants commonly “fan out” in the media to shill for organizations and never disclose payment. He cited former Howard Dean strategist Joe Trippi as a popular pundit who would be treated differently on his own website under the proposal. Mason said the difference is that Black would be posting content on his own site.

Center for Individual Freedom counsel Reid Cox urged the Commission to consider creating a “periodical” category under media to count organizations, such as his own, that post new content daily but not on a fixed schedule. The rule should “clearly and explicitly include every publisher,” Cox said. “Such preferential treatment not only raises the specter of the govt. choosing who can speak, it also threatens the speech of those with the least means.” Smith later expanded on Cox’s point, asking what harm could come from widening the media exemption. “If you have lots of money, you get press attention… the exception has already swallowed the rule for the rich.” The most popular blogs consist mainly of text, not expensive media-rich content, he added.

Gold decried earlier witnesses’ characterization of unions. There’s “really no clamor out there for the commission to wade” into Internet regulation, given the lack of observed corruption enabled online, Gold said, calling the proposed rules unenforceable in regard to millions of blogs and online journals: “The more you wade into this area… you're asking for a great amount of demand on your resources.”

Work Computer Rules Need a Little Tweaking

The problem of quantifying website value -- and how to isolate money spent only for online activities -- was broached by witnesses. The landmark Federal Election Commission Act (FECA) is about regulating money, not speech, but Gold said he has “never really gotten a satisfactory response” from the FEC in guidance or advisory opinions on how to calculate the value of such activities. “To what degree should we be… put in the task of trying to figure that out?” Gold said the AFL-CIO doesn’t spend much updating its website, and “99%” isn’t for electoral purposes. He suggested the Commission elicit a round of comments on how to quantify money spent online.

Gold said he isn’t concerned that the rules need revision for employees using work computers for political activities, either to shield them or punish employers who coerce employees into political activity. “Any organization… is going to have policies to restrict” how employees use office resources, obviating the need for FEC regulations, he said. The sheer number of devices in a typical employee’s custody -- laptops, cell phones and Blackberrys, among others -- make them too hard to track: “Nobody’s going to quantify that. There’s just no abuse there,” Gold said. Cox disagreed, saying many CFIF staffers are politically active and keep odd hours at work. “Four hours” -- the monthly limit under current law for political activity on office computers -- “is just an extremely limited amount of time.”

Thomas tried to get witnesses to admit that egregious situations would arise from too little regulation. He cited a Jupiter Research prediction that online advertising revenue would exceed $16 billion by 2009, $10 billion more than current annual revenue, with a sizable chunk of it political. If an advocacy group with a million-recipient list regularly sent e-mail blasts full of streaming video, paid for by a candidate in coordination with the group, wouldn’t that be exempt under your proposals? Thomas asked. Bauer and Gold said they'd never heard of such an arrangement, but Bauer added that its legal problems would have nothing to do with Internet transmission. Gold said online spending is much less predictable than offline: “You're dealing with a medium where what’s put into it may be inversely proportional to its impact.”

Bauer bristled at what he described as demonization of political activity. When Comr. Danny McDonald cited another comment the FEC received, warning that “wealthy individuals” could create websites and coordinate with campaigns without Internet oversight, Bauer brushed it off. Individuals with less income can spend lots of money on causes too, and there’s “no evidence it will have a corrupting effect,” he said. The same goes for individuals who band together and create a website to promote a candidate’s election. Politically active people shouldn’t have to worry “merely because they choose to commit to a project like that and communicate with a campaign,” he said.

Thomas asked if the 500-recipient disclaimer threshold for e-mail campaigns is “too onerous.” Terming it a vestige direct-mail regulations, Potter aid the FEC could ask Congress for a higher limit or simply limit the rule’s application to purchased lists. Sandstrom said the govt. shouldn’t go to the trouble of tracking down whether lists are purchased.

The proceedings were punctuated by moments of levity. Asking whether republication rules in the statute would work online, Comr. Ellen Weintraub asked, “How do we get around that statute?” before quickly retracting her question. “I'm going to pay for that one,” she added, to audience laughter.