Rules and Tools: The FEC and the Internet

Rules and Tools: The FEC and the Internet

BY Michael Bassik | Thursday, February 17 2005

An article appearing earlier this week in Roll Call has sparked debate on the Federal Election Commission’s announcement that it may soon rewrite current rules that regulate online political communication.

Under the current rules – crafted after the passage of the Bipartisan Campaign Finance Reform Act (BCRA) in 2002 – certain Internet communications are exempt from the strict regulations that apply to other forms of communication, such as television, radio, and print.

For example, television ads streamed over the Web are exempt from the “stand-by-your-ad” requirement.

However, this exception is not at the heart of the potential controversy. Rather, there are two other FEC rules that have independently been coined “The Internet Loophole” (or “The Internet Advantage,” depending upon your perspective) that look likely to close after a U.S. District Court said that the FEC’s:

“exclusion of Internet communications from the coordinated communications regulation severely undermines” the purposes of election law. The court continued: “To allow [online] expenditures to be made unregulated would permit rampant circumvention of the campaign finance laws and foster corruption or the appearance of corruption.”

Here is an explanation of the two Internet-related rules that the court was specifically criticizing and my opinion of what this all means.

1. Public Communications & State Parties

The first rule in question really only applies to state and local parties. As you probably know, BCRA was crafted primarily to remove unregulated soft money contributions from federal elections. As such, the law dictates that while state parties can continue to raise and spend soft money for local campaigns, they cannot spend soft money on (pay careful attention here) “public communications” that reference federal elections.

Seems pretty simple, right? No soft money for “public communications.” Got it. But wait! When the FEC looked up Congress' definition of “public communications,” they noticed it didn’t mention the Internet. See here for yourself:

BCRA Language

A public communication is “any communication by means of television (including cable and satellite), radio, newspaper, magazine, billboard, mass mailing, telephone bank or any other form of general public political advertising.

See what I mean? There’s not a single mention of online, electronic, web, computer or Internet communications anywhere. To hammer in their point that the Internet isn't covered by BCRA's definition, the FEC went as far as to include this specific language at the end of their public communication rule:

FEC-Added Language

Communications over the Internet are not included in the definition of public communication.

Everyone still with me?

OK, I know what you’re saying. Shouldn’t we interpret the Internet as falling under BCRA's inclusion of “any other form of general public political advertising?”

Well, the drafters and sponsors of BCRA sure thought it did, but since they did not specifically mention the web in the actual piece of legislation, the FEC opted to keep it out of its rule.

2. Coordinated Communications

The “advantage” with respect to coordinated communication on the Internet is directly related to the “advantage” with respect to the state and local party soft-money exception described above. Here goes.

Not happy with the current definition, BCRA asked that the FEC create a new, broader definition for the phrase “coordinated communication.” Much to the surprise of Congress, the FEC wound up doing the exact opposite and wrote rules that seem to have carved the Internet (among other media) out of its definition of coordination. As a result, coordination between individuals, candidates, 527s, political parties, and just about anyone else is completely legal with respect to online communication.

Once again, the “advantage” is linked to the FEC’s interpretations of terms like “public communication” and “electioneering communication” which both specifically and clearly exempt the web from regulation.

What does all this mean?

Not a whole lot. While it means that a big donor could have written the Democratic Party of Ohio a check for $1MM to spend toward online communication (i.e. web video, e-mail, banner advertising, etc.), state parties failed to take advantage of their, well…“advantage.”

Same goes for the coordination exception. While 527s could have coordinated their online communications with federal campaigns they wished to support, it appears that no one did.

Could these be the first major loopholes in the history of election law that were not taken advantage of?

Now, some might say that this was intentional. After all, it doesn’t take a genius to realize that just because something’s legal doesn’t mean that it’s a good idea. Especially in politics, candidates must weigh potential public relations nightmares with the benefit they receive from taking full advantage of the law.

But, at the end of the day, if the FEC winds up changing their rules to please the court, it’s unlikely we’ll even realize the difference.

What should the rules be?

I have two perspectives on this matter. And, to be honest, I haven’t quite worked them out in my head yet.

First, if Congress wants to regulate the Internet, they should say so in their legislation and not complain to the FEC after the fact. I don’t blame the FEC for sticking close to the text of the statute which fails to mention the Internet or anything related to it. While easier said than done, Congress would be better off passing another piece of legislation than begging a federal judge to squeeze out what the drafters of BCRA “meant” even though it’s not what they “wrote.”

I’m also a very biased individual. As an online political consultant, I’m in favor of letting the Internet grow as a political communications medium without unnecessary interference from the government. BCRA was meant to curb abuses by limiting the amount of money individuals, corporations, and organizations could throw into the political process. While the Internet was an important part of the 2000, 2002, and 2004 election cycles, it certainly wasn’t being abused. Therefore, a part of me says “don’t fix what ain’t broke.” Let the web live on as an unfettered medium.

But on the other hand, I’m not naïve, and realize that Congress will likely regulate the actions of the online community. It would be very safe to say that the web really is the “Wild West” of all available communication media. It’s also where there’s room for the greatest amount of abuse.

If left to our devices, it’s just a matter of time before we start seeing video ads without disclaimers, blogs and websites claiming to be independent but really coordinated hand-in-hand with candidates, e-mail and banners ads funded with unregulated soft money…the list goes on. If you think it won’t happen, just look at the “independent” bloggers who were paid handsomely by Thune’s Senate campaign in South Dakota to attack Daschle.

Although I really haven’t made up my mind, Congress might be right in wanting to monitor coordination and regulate the funding of online communication.

Getting the nod from Congress that the Internet is no different than any other medium might actually work to our advantage. It could go a long way in legitimizing our space and showing the political establishment that they can’t keep on thinking that the web is just a crazy medium filled with potential donors and nutty bloggers.

After all, wouldn’t you agree that the Internet is worthy of being defined as medium of “public communication?” I know I would.

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