It’s Gettin’ Hot (Headed) in Here: The FEC's Internet Summer

It’s Gettin’ Hot (Headed) in Here: The FEC's Internet Summer

BY Editors | Thursday, June 16 2005

The Federal Election Commission’s April proposal on how it should handle online communications like advertising and blog commentary has stirred much debate -- to use the polite term. With hearings scheduled for the end of the month, it's likely to remain a hot topic through the summer. So, while we have a moment, let’s go back to the beginning to assess the situation: How did the FEC’s Proposed Rules on Internet Communications get going in the first place?

With a judge. The rulemaking is required by an order from U.S. District Court Judge Colleen Kollar-Kotelly. This, itself, is the result of a lawsuit filed by Reps. Christopher Shays (R-Conn.) and Martin Meehan (D-Mass.) over the implementation of the Bipartisan Campaign Reform Act (BCRA (pronounced ‘bick-ra’ but better known as "McCain-Feingold" after the senators who first sponsored it). Among the provisions in the law which were tossed out through Judge Kollar-Kotelly’s ruling: an exemption that insulated the Internet from regulations applied to “public communications” like TV and radio broadcasts.

Now, “public communication” is one of those little terms that, as we lawyers say, can have “implications" -- few of which are welcome. In this case, the implications mostly relate to the activities of political parties because in this Internet world, well, public communication isn't what it used to be. It is something broader, cheaper and more ubiquitous that the FEC seems to understand. For instance, online ads and email are obviously “public communications," sent without fear or favor. But what about comments on a blog meant for an audience of like-minded individuals?

The Internet may look like a TV set since you need a screen to see what's there; but it's a much more private medium because readers and viewers have far more control over what they – and they alone – read and watch. Also, unlike TV, the amount of money spent on the Internet isn't necessarily related to the influence or exposure of the message. Spending on some expensive sites can be scarcely more effective than throwing money down a well; yet some of the most influential sites are shoestring operations.

The FEC is hewing to the law when it regulates spending, but, with the Internet in particular, it runs the risk of looking as though it's over-reacting, particularly when dealing with small dollar amounts. Should the law be concerned with trifles? And under such circumstances, how does it judge spending accurately? The answers aren't easy and when the process finally winds down, it's safe to say the Commission may rearrange the regulations with some sensitivity to the plight of individuals and their online activities.

But don’t expect a comprehensive fix to the issue.

On the Media
That diminished expectation won't sit well with those who have become so involved in the debate. This tension isn't new. The FEC has always struggled to find a balance between the prohibitions and freedom of speech since the Act’s first days; and when reading the comments, it's hard to avoid the conclusion that there may be no easy resolution to the quandary posed, short of wholesale revisions to federal campaign finance law.

Whether Internet journalists should be exempt from federal campaign finance regulation under this long-standing rule – by deeming themselves “media” – has consumed online interest and a great deal of heated discussion on political blogs. So let's take a look at where those who have submitted comments to the FEC regarding this issue (referred to here as “commentators”) say they stand.

Strictly speaking, these media exemption questions are not raised in the Shays court decision, and the comments from Democracy 21, the Campaign Legal Center and the Center for Responsive Politics suggests that the issue could wait. Most commentators, however, want the FEC to clarify whether online journalism qualifies for the exemption that its traditional, established counterparts enjoy. Why? If exempt, then a blog editor or writer can say what he wants about candidates and parties, spend what he wants, coordinate with campaigns, interview sources, show bias, and generally speak freely without fear of regulatory interference.

If accepted, following commission precedent, that exemption would extend to advertisements touting the publication of the exempted “news” or “commentary,” but not to advertisements that are not part of the “press function.” Now, a magazine can advertise a negative opinion piece about a candidate, but is forbidden to run ads elsewhere with a naked message to vote for or against a particular candidate. The ability to repeat editorial comments or statements made by partisans that is protected by the "press function" is a powerful tool when you consider the often incendiary and persistent nature of comments made on various sites.

As proposed, the FEC’s rule would apply the exemption to costs of “covering or carrying a news story, commentary, or editorial by any broadcasting station…newspaper, magazine or other periodical publication, whether the news story, commentary or editorial appears in print or over the Internet.”

This is tricky stuff. The explanation in the proposed rule claims that it is not meant to protect only “bona fide” press entities with offline components, but instead to extend the media exemption to all online media entities, whether they have offline components or not.

More troubling to the community of campaign finance reformers, the press exemption, broadly applied, could also allow corporations, unions and “prohibited sources” otherwise prevented from making expenditures in federal elections, to use their treasury funds to tout candidates.

How? If the press exemption applies to all news and commentary, then there’s nothing to say that the Service Employees International Union or WalMart is less entitled to it than anyone else. (In fact, under current law the FEC has held that the Sam’s Club magazine is a “periodical” entitled to the press exemption.) The reform lobby fears that a broad press exemption will eviscerate the law’s prohibitions, but, as the Online Coalition (founded by two PDF contributing editors, Michael Bassik and Mike Krempasky) observes, such “evisceration” already occurs in the case of some of the largest and most influential corporations on the planet -- media corporations. Newspapers and magazines, most of which are owned by large corporations, can influence elections by their reportage and their editorials; yet their ability to curry favor in this manner with political elites is something the law allows.

The Politics of Blogging
Bloggers, on the other hand, are sometimes seen as the antidote to this corporate-think. Though sometimes influential, their sites are low-cost, often amateur, run in an ad hoc manner by individuals and loosely affiliated groups, some of whom have incorporated (mostly for liability limited purposes). Most commentators agree that blogs should enjoy some kind of protection, either as media entities or as individual volunteer activities. But not everyone's willing to spring the door wide open. Carol Darr, director of the Institute for Politics, Democracy and the Internet, writing for the organization, concluded that the press exemption should not be extended to bloggers who are activists, donors or fundraisers, insisting that “for thirty years the campaign finance laws have made a fundamental distinction between political activists and the news media, in order to protect a free press while at the same time limiting the influence of big money on federal elections.”

But, Darr sees potential danger: “If anyone can publish a blog, and if bloggers are treated as journalists, then we can all become journalists. If millions of ‘citizen journalists’ as bloggers like to call themselves, are given the rights and privileges of the news media ...” a massive loophole will “eviscerate the contribution and expenditure limits of the campaign finance law” and diminish “the privileged status the press currently enjoys.” Darr argues this could lead to the erosion of shield laws protecting the anonymity of sources.

Some of us fail to see the civic danger in allowing “millions of citizen journalists” to speak about politics to the public, even if that means they potentially could make in-kind contributions or unreported expenditures under the existing legal regime. Moreover, considering the increasing amount of skepticism regarding the press, the notion that Internet journalism will unfairly reduce the status “the press currently enjoys” is Rather humorous to some (pun intended).

Not surprising, other commentators take a more generous view of blogging. The Republican National Committee noted that “bloggers today unquestionably perform media functions” and that the exemption should extend to them. Democratic attorney Bob Bauer, himself a blogger, recommends that the Commission should, “as a matter of policy” determine that bloggers “will not be the target of regulation. No corruption effected through blogging has been established. None should be predicted, and none assumed.” Although the FEC’s focus had been on the treatment of individual bloggers, several commentators also urge that group blogs -- that might otherwise be regulated as political committees -- receive some clear exception for their activities.

In addition, bloggers may also receive some protection from the “volunteer” exemption, where a volunteer’s use of his own property and time is not regulated as a contribution or expenditure. For the most part, commentators react negatively to the FEC’s suggestion that employees who have access to employer-provided computers in off hours would have to limit their Internet activities. They, instead, favor an approach that would exempt that activity so long as it was the individual’s own political expression and not the corporation’s. After all, not everyone uses his own computer to do online "work." This proposed rule, for instance, could prevent academics at private institutions from using their office computers for Internet journalism. Of course, these issues become less important –- and the law less complex -- if the press exemption is broadly applied.

The Online Coalition suggests that it is wrong to parcel out protection based on the form of the message, and that the better approach would be to exempt “news opinion or commentary’ regardless of mode of dissemination.” Using his double-barrel credentials, University of Tennessee law professor Glenn Reynolds (a.k.a. Instapundit) makes a similar point, observing that he could “imagine few more effective ways of diminishing public regard for the political process than declaring unfettered political speech the domain of a narrow guild of favored professionals.”

Where Do We Go from Here?
So what will happen? In the case of blogging, the Commission will likely extend the press exemption to Internet journalism somehow. But it's unlikely to clarify the rule as commentators would prefer, to protecting all news, commentary or editorial content regardless of medium. Rather, the FEC may stick with the proposed rule’s approach and award press status on a case-by-case basis.

This is surely a result that favors uncontroversial, established, regular, serious, and impersonal bloggers and journalists, while potentially trapping the occasional, informal, oddball or fringe writer. Potentially, precedents in this area could leak back into regulation of conventional media. That would seem to be exactly the wrong response to the tension over the balance between free and sponsored speech that's long plagued the Commission. But, human nature being what it is, press exemption questions will more easily attract the four Commission votes necessary for the Commission of six to render a favorable Advisory Opinion if the blogger or journalist is perceived as conventional.

The FEC will hold public hearings on the Internet Rule in Washington, D.C. June 28 and 29. After hearing from the public – and the list of those who want to testify is long -- legal staff will seek input from the Commissioners and prepare a final draft for consideration. Then, the Commission will vote on a Final Rule, probably in the late summer. Meanwhile, campaign finance reform proposals on Capitol Hill (H.R. 1606) containing a Congressional Internet exemption protecting the Internet from the “public communication” rules-- similar to the regulatory one tossed by the District Court -- are gaining traction. Think of it as Washington's long, hot Internet summer.

Allison R. Hayward is a Washington attorney who writes about federal campaign law and related issues. Until recently she served as counsel to FEC Commissioner Bradley A. Smith. She blogs at the SkepticsEye.Com.

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