FEDERAL ELECTION COMMISSION
11
[Notice 2005 – X]
Internet
Communications
AGENCY: Federal Election Commission.
ACTION: Notice of Proposed Rulemaking.
SUMMARY: The Federal Election Commission requests comments
on proposed changes to its rule that would include paid advertisements on the
Internet in the definition of “public communication.” These changes to the Commission’s rule would
implement the recent decision of the U.S. District Court for the
DATES: Comments must be received on or before
[INSERT DATE 60 DAYS AFTER THE DATE OF PUBLICATION IN THE FEDERAL
REGISTER]. The Commission will hold a
hearing on the proposed rules on [INSERT DATE OF HEARING] at
ADDRESSES: All comments must be in
writing, must be addressed to Mr. Brad C. Deutsch, Assistant General Counsel,
and must be submitted in either electronic, facsimile, or hard copy form. Commenters are strongly encouraged to submit
comments electronically to ensure timely receipt and consideration. Electronic comments must be sent to either
internet@fec.gov or submitted through the Federal eRegulations Portal at
<www.regulations.gov>. Any
commenters who submit electronic comments and wish to testify at the hearing on
this rulemaking must also send a copy of their comments to
internettestify@fec.gov. If the
electronic comments include an attachment, the attachment must be in the Adobe
Acrobat (.pdf) or Microsoft Word (.doc) format.
Faxed comments must be sent to
contact: Mr.
Brad C. Deutsch, Assistant General Counsel, Ms. Amy L. Rothstein, Mr. Richard
T. Ewell, or Ms. Esa L. Sferra, Attorneys, 999 E Street, N.W.,
SUPPLEMENTARY
INFORMATION:
The Bipartisan
Campaign Reform Act of 2002, Pub. L. 107-155, 116 Stat. 81 (
First, section 441i(b) of BCRA requires State, district, and local political party committees to use only Federal funds[1] for certain types of “Federal election activity,” including for any “public communication that refers to a clearly identified candidate for Federal office . . . and that promotes or supports a candidate for that office, or attacks or opposes a candidate for that office[.]”[2] 2 U.S.C. 431(20)(A)(iii) (emphasis added). BCRA defines a “public communication” as “a communication by means of any broadcast, cable, or satellite communication, newspaper, magazine, outdoor advertising facility, mass mailing, or telephone bank to the general public, or any other form of general public political advertising.” 2 U.S.C. 431(22) (emphasis added).
Second, section
441i(b) of BCRA also restricts the funds that State, district, and local
political party committees may use for certain "generic campaign
activity." 2 U.S.C.
431(20)(A)(ii); 11
Third, BCRA expressly repealed the
Commission’s then-existing rules on “coordinated general public political
communication” at former 11
Fourth, Congress revised the “disclaimer”
requirements in 2 U.S.C. 441d, by requiring a disclaimer when a “disbursement”
(rather than an “expenditure”) is made for certain communications.
The Commission promulgated regulations
in 2002 to implement BCRA's provisions regarding (1) “public communication,”
(2) “generic campaign activity,” (3) coordination with candidates and political
parties, and (4) disclaimers. See
Final Rules on Prohibited and Excessive Contributions; Non-Federal Funds or
Soft Money, 67 FR 49,064 (
In Shays
v. Federal Election Commission, 337 F.Supp.2d 28
(D.D.C.) appeal filed, No. 04-5352 (D.C. Cir. .”[4] Shays at 69. The district court
concluded that “[w]hile all Internet communications do not fall within [the
scope of ‘any other form of general public political advertising’], some
clearly do.” .”.
Second, the
district court found the Commission’s rule defining the term “generic campaign
activity” to be “an impermissible construction of the Act,” to the extent it
incorporated the regulatory definition of “public communication,” which
excludes all forms of Internet communications.
Third, the
district court invalidated the “content prong” of the Commission's coordinated
communications rule at 11
The district court
remanded each of these rules to the Commission for further action consistent
with its opinion. Accordingly, the Commission is issuing this Notice of
Proposed Rulemaking (“NPRM”), which addresses several topics. First, the proposed rules in 11 .” This
proposed change addresses the Shays court’s concern about the wholesale
exclusion of all Internet communications from the definition of “public
communication..”
Because only Internet communications that constitute “general public political advertising,” as
defined by the regulation, would be included in the proposed definition of “public
communication” in section 100.26, the Commission anticipates that the proposed
definition would have an extremely limited impact, if any, on the use of the
Internet by individuals as a means of communicating their political views,
obtaining information regarding candidates and elections, and participating in
political campaigns.
Second, this NPRM republishes and invites
comment on the current definition of “generic campaign activity” in section
100.25, which includes the term “public communication..” The Commission notes that any changes to the
underlying definition of “public communication” pertaining to the Internet
would automatically apply to “generic campaign activity..”
Third, the Commission proposes to modify
somewhat its rules at 11
In addition, the Commission is proposing to
add new rules specifically excepting certain volunteer activity usingon
the Internet from the definitions of “contribution” and “expenditure,” and by
clarifying that the rules in section 114.9 regarding the use of corporate or
labor organization facilities apply to the use of computer equipment and
Internet services. Lastly, the proposed
rules seek to establish an Internet exception from the definitions of
"contribution" and "expenditure" for certain media activity.
The Commission has
announced plans to initiate a separate rulemaking on certain non-Internet
aspects of the coordinated communication rules at 11
BCRA defines a
“public communication” as “a communication by means of any broadcast, cable, or
satellite communication, newspaper, magazine, outdoor advertising facility,
mass mailing or telephone bank to the general public, or any other form of
general public political advertising.” 2
U.S.C. 431(22). The Commission's current
rules at 11
As a consequence,
Internet communications are excluded from other rules governing the funding of
a “public communication..”
For example, State, district, and local political party committees and
organizations must use only Federal funds for any “public communication” that
promotes, supports, attacks or opposes a Federal candidate. See 2 U.S.C. 431(20)(A)(iii) and 441i(b); 11
The term "public communication" is also
used to determine whether a disclaimer is needed on certain communications
under 11
In light of the Shays decision, the Commission is
reconsidering which Internet communications would qualify as “general public political
advertising,” and thus would be a “public communication..” The Commission’s proposed rule attempts to
strike a balance between provisions of the Act that regulate “general public
political advertising” and significant public policy considerations that
encourage the Internet as a forum for free or low-cost speech and open
information exchange.
A. The Internet and
the 2004 Elections
The Internet has unique
characteristics that distinguish it from traditional media.[5] Unlike traditional media, “the Internet can
hardly be considered a ‘scarce’ expressive commodity. It provides relatively unlimited, low-cost
capacity for communication of all kinds.”
The Internet also
differs from traditional media because individuals must generally be proactive
in order to access information over the Internet, unlike users of traditional
media. The Supreme Court has found that
communications over the Internet are not as “invasive” as communications
through traditional media.
The Internet’s
accessibility, low-cost, and interactive features make it a popular choice for
sending and receiving information. In 2004, an estimated 201 million people in
the
A growing segment of the American population uses the Internet as a supplement to, or as a replacement for, more traditional sources of information and entertainment, such as newspapers, magazines, television, and radio. In mid-2004, 92 million Americans reported obtaining news from the Internet.[9]
As the public has turned increasingly to the Internet for information and entertainment, advertisers have embraced the Internet and its new marketing opportunities. Internet advertising revenue increased by 21 percent between 2002 and 2003 and reached $4.6 billion in the first six months of 2004.[10]
The 2004 election cycle marked a dramatic shift in the scope and manner in which citizens used websites, blogs,[11] listservs,[12] and other Internet communications to obtain information on a wide range of issues and candidates.[13] The number of Americans who used the Internet as a source of campaign news more than doubled between 2000 and 2004, from 30 million to 63 million.[14] An estimated 11 million people relied on politically oriented blogs as a primary source of information during the 2004 presidential campaign,[15] and a full 18 percent of all Americans cited the Internet as their leading source of news about the 2004 presidential election.[16]
Because the
Internet is a unique form of communication, the Commission proposes to preserve
the general exclusion of Internet communications from the definition of “public
communication” in 11
At the same time,
however, the Commission recognizes that Internet communications may, in some
circumstances, constitute “general public political advertising” within the
definition of “public communication” in 11
Accordingly, the
Commission proposes to amend 11 a banner
advertisements, or “pop-up” advertisements.[17]
The Commission invites comment on whether announcements
placed for a fee on another entity’s website should be considered “general
public political advertising,” and therefore, a “public communication” under 11
If a mode of communication does not cost any money, can it
be “general public political advertising” and therefore a “public communication”
within the meaning of the statute? For
example, a person might appear in a public square and give a campaign speech
before 500 or more people. If such a
public speech does not cost any money to undertake, is it outside the scope of
“general public political advertising” under the statute and therefore not a
“public communication”? Likewise, is
such a public speech outside the scope of an “expenditure” or “contribution”
under the statute? Also, should “general
public political advertising” include Internet advertisements where a the
advertising space was provided for something of value other than a monetary
payment, for example through an exchange of comparable advertising? Although the Commission rule excludes iInternet
activity that is not placed for a fee, should the Commission amend its
regulation to explicitly state that it is not including “bloggers” in the
definition of “public communication”?
The Act and
Commission regulations recognize that corporations and labor organizations can
communicate with their restricted class, but not with the general public, on
“any subject,” and that membership organizations may similarly communicate with
their members. See 2 U.S.C.
431(9)(B)(iii) and 441b(b)(2)(A); 11
C. Effect of Proposed Definition of "Public
Communication" on Federal Election Activity by State, District, and Local
Party Committees under 11
BCRA defines “Federal election activity” to include “a
public communication that refers to a clearly identified candidate for Federal
office . . . and that promotes or supports a candidate for that office, or
attacks or opposes a candidate for that office[.]” 2 U.S.C. 431(20)(A)(iii); see also 11
The Commission notes that the original definition of 100.26
was promulgated to permit State, district, and local committees to make
references to their fFederal
candidates on the committees’ official websites without automatically
federalizing the year-round costs of maintaining such a site. It should be noted that this effect of the
Internet exclusion was not rejected by the Shays court. The proposed rule would continue to allow
this exclusion for these websites, while requiring that state, district, and
local party committees use exclusively fFederal
dollars to place advertisements that promote, support, attack, or oppose
(“PASO”) a fFederal
candidate on another individual’s or entity’s
website. State, district, and local
committee websites must still maintain disclaimers as required under 11
The Commission invites comment on this approach and on whether
the Commission should consider further changing its definition of “public
communication..”
If a mere PASO reference to a fFederal
candidate on a State, district, or local committee’s website were to constitute
a public communication, does that require that the entire website be paid for
with hard dollars? If not, the
Commission seeks comment on how to allocate that portion of the website that
must be paid for with hard dollars — --
for example, based on the time and space of the website that contains PASO
communications as compared to the site overall, or should another allocation
method be required? In addition, what
costs should be included in the allocation calculations —;
all of the costs associated with establishing and maintaining the website, or
only the marginal costs of creating and maintaining the PASO communication, or
some other formulation?
The Commission seeks comment on whether any payment by a State, district, or local party to an outside vendor for content that PASO’s a Federal candidate that is exclusively placed on the party’s website should constitute “general public political advertising” and be deemed a “public communication,” thus requiring regulation under 2 U.S.C. 441i(b)(1).
“Federal election activity” includes “generic
campaign activity” conducted in connection with an election in which a
candidate for Federal office appears on the ballot. 2 U.S.C. 431(20(A) and 11
As noted above, the Shays court
rejected the Commission’s definition of “generic campaign activity” on two
grounds: first, that it improperly excluded all Internet communications and,
second, for lack of notice to the public that it would be limited to “public
communications” as defined in 11
IV. 11
With its relatively low-cost, wide availability, and ease of access, the Internet is used by millions of individuals daily to share information and air their views on a variety of subjects. The Commission recognizes that significant policy reasons support the continued exclusion of most Internet communications from the disclaimer requirements.
As the Commission has stated previously, the Internet “is a medium that allows almost limitless, inexpensive communication across the broadest possible cross-section of the American population. Unlike media such as television and radio, where the constraints of the medium make access financially prohibitive for the general population, the Internet is by definition a bastion of free political speech, where any individual has access to almost limitless political expression with minimal cost.” Soft Money Final Rules, 67 FR at 49,072. To this extent, the Internet can be the modern equivalent of a soapbox in a public square. See Reno v. ACLU, 521 U.S. 844, 870 (1997) (“Through the use of chat rooms, any person with a phone line can become a town crier with a voice that resonates farther than it could from any soapbox. Through the use of Web pages, mail exploders, and newsgroups, the same individual can become a pamphleteer.”)
The Commission notes 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. This is particularly true given that the identity of the sponsor of an Internet communication is often already apparent from the face of the communication. The Commission seeks comment on these policy rationales and alternative approaches to the disclaimer requirement.
The Act and the
Commission’s rules require certain communications to include clear and conspicuous
statements to the public regarding the sources of their funding. See 2 U.S.C. 441d; 11
A. Scope of Disclaimer Requirements – Proposed
11
In
the existing disclaimer regulations in section 110.11(a), the term “public
communication” differs slightly from the term “public communication” as defined
in 11
The
Commission is concerned that the current regulation emphasizes the number of
e-mail communications sent, rather than focusing on whether an expenditure was
made that would justify governmental regulation. The Commission notes that the statute
generally seems to be predicated on an “expenditure” or “disbursement” being
made. The Commission is not interested
in requiring disclaimers on the personal communications of private
citizens. The Commission is concerned
that the lack of definition for the term “unsolicited,” could have the effect
of discouraging individuals from engaging in discussion and advocacy that is
core political speech protected by the First Amendment and that is virtually
cost-free.
Therefore,
the Commission is proposing to change the disclaimer requirement in 11
The
revisions to the disclaimer provisions in 11
The
Commission seeks comments on these proposed revisions to 11
In
the existing disclaimer regulations in section 110.11(a), the term “public
communication” differs slightly from the term “public communication” as defined
in 11 CFR 100.26. Specifically, “public
communication” as defined in current 11 CFR 100.26 expressly excludes Internet
communications, whereas “public communication” as defined in the current
disclaimer regulations includes “unsolicited electronic mail of more than 500
substantially similar communications and Internet websites of political
committees available to the general public.”
11 CFR 110.11(a). Thus, political
committees must include disclaimers on their websites available to the general
public, and in unsolicited e‑mail of more than 500 substantially similar
communications. Other persons must also
provide disclaimers in unsolicited e-mail of more than 500 substantially
similar communications that expressly advocate the election or defeat of a
clearly identified Federal candidate or solicit a contribution.
The
Commission is concerned that the current regulation emphasizes the number of e-mail
communications sent, rather than focusing on whether an expenditure was made
that would justify governmental regulation.
The Commission notes that the statute generally seems to be predicated
on an “expenditure” or “disbursement” being made. The Commission is not interested in requiring
disclaimers on the personal communications of private citizens. The Commission is concerned that what may be
considered a relatively low numerical threshold, coupled with the lack of
definition for the term “unsolicited,” could have the effect of discouraging
individuals from engaging in discussion and advocacy that is core political
speech protected by the First Amendment and that is virtually cost free.
Therefore,
the Commission is proposing to change the disclaimer requirement in 11 CFR
110.11(a) to focus on those e-mail communications for which either the e-mail
addresses of any of the recipients were acquired through a commercial
transaction, or for which another party is paid to create or transmit the
e-mail communication. Such transactions
would not include routine payments for email and Internet access and associated
services provided by an Internet Service Provider. The Commission seeks comment on whether any
other transactions should not be included? Such a disclaimer requirement is intended to
strike a balance between the disclosure purposes of the Act and regulation of
expenditures, and the protection of individual free speech and robust
communication. The Commission seeks
comment on this approach. Should the
Commission adopt this approach, but continue to include a 500 e-mail
threshold? Given the ease of sending
large numbers of e-mail, would a larger numerical threshold be appropriate? The Commission also seeks comment on whether
a minimum cost should be included in this disclaimer approach, such as the $250
threshold contained in the statute for independent expenditures. See 2 U.S.C. 434(c)(1).
The
Commission also seeks comment on whether to retain the current email disclaimer
requirements. If such an approach is
retained, the Commission seeks comment on whether the numeric threshold should
be increased and whether the Commission should define the term
“unsolicited.” The Commission,
alternatively, seeks comments on whether a disclaimer requirement for e-mail
should be removed entirely from the regulation.
The
revisions to the disclaimer provisions in 11 CFR 110.11(a) would still require
disclaimers for any “public communication” as defined at 11 CFR 100.26 made by
a political committee, and for any “public communication” by any person that
expressly advocates the election or defeat of a clearly identified Federal
candidate or that solicits a contribution.
See 11 CFR 110.11(a). The
proposed definition of “public communication” in section 100.26 would have the
effect of expanding the scope of the disclaimer requirements in section 110.11
to any advertisement placed for a fee on another party’s website that expressly
advocates the election or defeat of a clearly identified Federal candidate or solicits
a contribution. In addition, political
committees would continue to be required to post disclaimers on their websites
provided that they are “available to the general public.”
The
Commission seeks comments on these proposed revisions to 11 CFR 110.11(a).B. Bloggers Paid By Candidates
News reports indicate that in the 2004 elections some
individual bloggers received significant fees from the campaign committees of
at least one presidential candidate and one Senate candidate to promote the
candidates’ campaigns on their blogs.[19] For example, the operator of the ninth most
“linked” blog on the Internet, which received as many as one million visits
daily, reportedly received $12,000 over a four-month period from one
presidential candidate.[20] The news reports further indicate that not
all of the bloggers disclosed the payments to the blogs’ readers.
The Commission notes that its current rules require a
political committee to disclose this type of disbursement on its publicly
available reports filed with the Commission.
The Commission does not therefore propose to change the disclaimer
regulation in 11
A.
Content Standards for Coordinated Communications – 11
Payments
for certain communications that are coordinated with a candidate, a candidate’s
authorized committee, a political party committee, or any of their agents, are
treated as in-kind contributions to the candidate, the candidate’s authorized
committee, or the political party committee.
See 2 U.S.C. 441a(a)(7); 11
In Shays, the court struck down the “content prong” of the coordinated communication test. The Commission announced its intention to propose changes regarding the non-Internet aspects of the coordinated communication regulations in a separate rulemaking to take place in May 2005, with final rules pending the outcome of the appeal.
Because of the
pending appeal and the upcoming rulemaking on coordinated communications, the
Commission is not proposing to revise 11
The Commission’s rule would exempt from the coordinated communication rules advertisements that require payments to outside vendors to create, but that are placed only on the payor’s own website. This could include a corporation or other prohibited source. The Commission seeks comment on whether this approach is appropriate, and on whether any other parts of the Commission’s regulations, e.g. those provisions at 11 C.F.R. 114.4 that deal with corporate and labor communications beyond the restricted class, can be interpreted to nonetheless place restrictions on such activity. The Commission’s rule would also exempt from the coordinated communication rules advertisements that are placed on a prohibited source’s website for free, even though a fee would normally be charged. Is this an appropriate course? Do any of the Commission’s other rules already regulate this so that such activity would be prohibited?
B. Dissemination, Distribution, or Republication
on the Internet – 11
Under the current
Commission regulations, a person makes a contribution by financing “a
public communication that disseminates, distributes, or republishes, in whole
or in part, campaign materials prepared by a candidate, the candidate’s
authorized committee, or an agent of any of the foregoing, unless certain
exceptions apply. 11
The
Commission notes that changes to the definition of public communication would
expand the reach of this regulation to individuals or entities that place
announcements for a fee on another individual’s or entity’s website, when the
advertisement content otherwise constitutes a republication regulated under 11
C.F.R. 109.21(c)(6).
The “party
coordinated communication” rule at 11
The term “public
communication” is also used in 11
The
Commission recently promulgated revisions to its rules on the allocation of
certain expenses by SSFs and nonconnected committees. See 11
The effect of the
proposed revisions to the definition of “public communication” in 11
BCRA prohibits
candidates for State and local offices, and their agents, from using
non-Federal funds to pay for any “public communication” that PASOs a candidate
for Federal office. See 2 U.S.C.
441i(f). Under the Commission’s
regulations, an “agent” includes any person who is authorized by a candidate
for State or local office to “spend funds for a public communication,” as
defined in 11
The Commission is
also considering whether expressly to to extend
the protections of the exception for news stories, commentaries and editorials
to media activities that occur on the Internet.
In the Act, Congress exempted from the definition of “contribution” and “expenditure”
“any news story, commentary, or editorial distributed through the facilities of
any broadcasting station, newspaper, magazine, or other periodical publication,
unless such facilities are owned or controlled by any political party,
political committee, or candidate.” 2
U.S.C. 431(8)(B)(i) and 431(9)(B)(i). In enacting the statutory exemption for the
media, Congress intended to assure “the unfettered right of the newspapers,
television networks, and other media to cover and comment on political
campaigns.” H.R. Rep. No. 93-1239, 93d
Congress, 2d Session at 4 (1974) (emphasis added). The Commission has implemented this statutory
exemption in its regulations. See
11
Many aspects of
the contemporary media did not exist, or were not as prevalent, when Congress
enacted the statutory exemption in the Act in the 1970s. In the past, however, the Commission has made
clear that the statutory exemption applies to new and emerging forms of mass
media, even if they did not exist or were not widespread when Congress passed
the Act. For example, recognizing that
cable programming utilized the same aspects of speech and communication of
ideas as broadcast stations, the Commission modified its regulations to make
clear that the Act’s statutory exemption applied to cable programming. The Commission noted that “although the cable
television industry was much less developed when Congress expressed this
intent, it is reasonable to conclude that cable operators, programmers and
producers, when operating in their capacity as news producers and distributors,
would be precisely the type of ‘other media’ appropriately included within this
exemption.” 61 FR 18,050 (
The Commission is
now considering whether to amend its regulations to make clear that the
statutory exemption also applies to media activities on the Internet. Specifically, the Commission is proposing to
amend sections 100.73 and 100.132 of its regulations to indicate that any media
activities that otherwise would be entitled to the statutory exemption are
likewise exempt when they are transmitted over the Internet. The proposed revisions
would still require that the exemption extend only to those entities who are a
media entity and who are covering or carrying a news story, commentary, or
editorial but would extend the existing exemption to the same activities
conducted on the internet by media entities. In so doing, the Commission recognizes that
media operations increasingly take place on the Internet. The proposed revision would allow for the
application of the media exemption to all forms of media activities on the
Internet, whether it be through a website, e-mail, or some other form of
Internet communication.
The Commission seeks comment on the proposed revisions to its regulatory media exemption for news stories, commentaries, and editorials. The Commission also seeks comment on whether the proposed revisions are consistent with or required by the statutory language of the Act. The Commission further seeks comment on the appropriate breadth of the exemption to media activities over the Internet. Should the exemption be limited to entities who are media entities and who are covering or carrying a news story, commentary, or editorial? Should the exemption be limited only to the Internet activities of media entities that also have off-line media operations? The Commission notes that the proposed regulation expressly rejects a policy that only a bona fide press entity with an off-line component is entitled to protection in their on-line news stories, commentaries, and editorials.
The proposed
revision would extend the media exemption to media entities whose activities
exist solely on-line, without a print or broadcast component, as well as to
media entities who have both a broadcast or print component andas
well as an on-line presence.
For example, Salon.com, Slate.com, and Drudgereport.com,
Dailynewsonline.com, and Worldnetdaily.com do not publish
off-line. Such on-line sites provide
direct access to political news and events and offer commentary on current
affairs. The Commission recognizes that on-linesuch
sites are as accessible as printed periodicals or news programsdistributed
to the general public and
therefore proposes to clarify that extend the
media exemption extends to those entities who may
solely have an on-line presence asnd
well as to those entities who have an interneton-line
component in addition to their broadcast or print activities. The Commission seeks comm