Federal Election Commission.
Final Rules and Transmittal to Congress.
The Federal Election Commission is amending its rules to include paid advertisements on the Internet in the definition of “public communication.” These final rules implement the recent decision of the U.S. District Court for the District of Columbia in
Mr. Brad C. Deutsch, Assistant General Counsel, Mr. Richard T. Ewell, Ms. Amy L. Rothstein, or Ms. Esa L. Sferra, Attorneys, 999 E Street, NW., Washington, DC 20463, (202) 694–1650 or (800) 424–9530.
The Commission is promulgating these final rules to provide guidance with respect to the use of the Internet in connection with Federal elections. The Commission commenced this rulemaking following a decision of the United States District Court for the District of Columbia in Shays v. Federal Election Commission, 337 F. Supp. 2d 28 (D.D.C. 2004) (“Shays District”), aff'd, 414 F.3d 76 (D.C. Cir. 2005) (“
These final rules follow the publication of a Notice of Proposed Rulemaking (“
After reviewing the written comments and testimony provided at a hearing on June 28 and 29, 2005,
The Commission is aware of the heightened importance and public awareness of any change to its rules that could affect political activity and speech on the Internet. The Commission notes that the change to the definition of “public communication” in this rulemaking is a change to a definition that has a narrow impact on the law.
Through this rulemaking, the Commission recognizes the Internet as a unique and evolving mode of mass communication and political speech that is distinct from other media in a manner that warrants a restrained regulatory approach. The Internet's accessibility, low cost, and interactive features make it a popular choice for sending and receiving information. Unlike other forms of mass communication, the Internet has minimal barriers to entry, including its low cost and widespread accessibility. Whereas the general public can communicate through television or radio broadcasts and most other forms of mass communication only by paying
When paid advertising on another person's website does occur on the Internet, the expense of that advertising sets it apart from other uses of the Internet, although even the cost of advertising on another entity's website will often be below the cost of advertising in some other media.
These final rules therefore implement the regulatory requirements mandated by the
As a whole, these final rules make plain that the vast majority of Internet communications are, and will remain, free from campaign finance regulation. To the greatest extent permitted by Congress and the
Under the Administrative Procedure Act (“APA”), 5 U.S.C. 553(d), and the Congressional Review of Agency Rulemaking Act, 5 U.S.C. 801(a)(1), agencies must submit final rules to the Speaker of the House of Representatives and the President of the Senate and publish them in the
The Internet has a number of unique characteristics that distinguish it from traditional forms of mass communication.
It is common for businesses, groups, and even individuals, to make their own media—their website space—available to readers without charge. Whereas a newspaper can afford to devote only a limited amount of its print to others without charge, in the form of letters to the editor, and a television station can afford to provide only a very limited amount of air time to viewers for similar purposes, some bloggers can and often do publish every message submitted by readers. In fact, one commenter drew upon his own experience as a blogger in noting that much of the emerging Internet culture depends on collaboration for the construction of a blog or website, the generation of content (according to the blogger's testimony, most blogs do not have paid staff to perform such functions), and the sharing of information and online resources. The commenter stated that his website has more than 50,000 registered users contributing to its content, and he estimated that he writes only about 2,000 of the 200,000 words of content published on his website each day.
A number of commenters also noted that the Internet differs from traditional forms of mass communication because individuals must generally be proactive in order to access information on a website, whereas individuals receive information from television or radio the instant the device is turned on, or passively view a billboard while driving or walking down a street. These comments echo the Supreme Court's observation that communications over the Internet are not as “invasive” as communications made through traditional media.
During 2005, an estimated 204 million people in the United States used the Internet.
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. By mid-2004, 92 million Americans reported obtaining news from the Internet.
The 2004 election cycle also marked a dramatic shift in the scope and manner in which Americans used websites, blogs, listservs,
Individuals not only sought information about campaigns on the Internet, but also took advantage of the low cost of Internet communication as they took active roles in supporting policies and candidates. According to a number of commenters, common Internet activities have included: Posting commentary regarding Federal candidates and political parties on their own websites; submitting comments regarding Federal candidates and political parties on websites owned by other individuals; creating advertisements, videos, and other audiovisual tools for distribution on the Internet; fundraising; promoting or republishing candidate-authored materials; participating in online “chats” about campaigns; providing hyperlinks from their own websites to campaign websites and other websites; and using e-mail to organize grassroots political activities.
A number of commenters suggested that the potential for a free exchange of information and opinions through the Internet promotes access to information about candidates, ballot measures, and legislation. More than half of the hundreds of commenters expressed concern that the same unique characteristics of the Internet that make it so widely accessible to individuals and small groups also makes it more likely that individuals and small groups whose web activities generally are not regulated by FECA might engage in activities that unintentionally trigger Federal regulation. Whereas the corporations and other organizations capable of paying for advertising in traditional forms of mass communication are also likely to possess the financial resources to obtain legal counsel and monitor Commission regulations, individuals and small groups generally do not have such resources. Nor do they have the resources, as one commenter cautioned, to respond to politically motivated complaints in the enforcement context. Several commenters warned that individuals might simply cease their Internet activities rather than attempt to comply with regulations they found overly burdensome and costly. Thus, some commenters asserted, it is essential that the Commission narrow the scope and impact of any regulation of Internet activity and establish bright-line regulations to delineate any restricted activity in order to avoid chilling political participation and speech on the Internet.
The Bipartisan Campaign Reform Act of 2002, Public Law 107–155, 116 Stat. 81 (2002) (“BCRA”), amended the Federal Election Campaign Act of 1971, as amended (the “Act”), 2 U.S.C. 431
A number of these changes hinged on the definition of “public communication.” First, Congress required State, district, and local political party committees and organizations, as well as State and local candidates, to use only Federal funds
Second, Congress restricted the funds that State, district, and local political party committees may use for certain types of “Federal election activity” (“FEA”), including “generic campaign activity.” 2 U.S.C. 431(20)(A)(ii) and 441i(b); 11 CFR 100.24(2)(ii) and 300.33(a)(2).
Third, Congress expressly repealed the Commission's then-existing rules on “coordinated general public political communication” at former 11 CFR 100.23 and instructed the Commission to promulgate new regulations on “coordinated communications paid for by persons other than candidates, authorized committees of candidates, and party committees.”
Fourth, Congress revised the “disclaimer” requirements in 2 U.S.C. 441d by requiring a disclaimer whenever a disbursement for “general public political advertising” is either made by any political committee, or expressly advocates the election or defeat of a clearly identified candidate, or solicits any contribution. The Commission relied primarily on the definition of “public communication” in 11 CFR 100.26 when it implemented the new disclaimer requirements, although it also required disclaimers for political committee websites available to the general public and certain unsolicited electronic mailings of more than 500 substantially similar communications.
The Commission also incorporated the term “public communication” into two other regulations at 11 CFR 300.2(b)(4) and 11 CFR 106.6, and thereby excluded Internet content from those requirements as well. The first of these regulations defines an “agent” of a candidate for State or local office as a person who has actual authority by that candidate to “spend funds for a public communication.”
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Most commenters who addressed the
Another commenter generally supported the proposed rule, but recommended that the definition also encompass advertisements provided in exchange for something of value other than money (
A few commenters expressed concern that the proposed rule would allow corporations and labor organizations to make unregulated in-kind contributions to Federal candidates through coordinated communications on the Internet, although such coordinated communications would be regulated or prohibited if done through other media. One group of commenters listed activities of this nature that they believed would be permitted under the proposed definition of “public communication” in 11 CFR 100.26, including: (1) An individual, political committee, or corporation pays to place banner advertisements
The Commission concludes that Internet communications placed on another person's website for a fee are “general public political advertising,” and are thus “public communications” as defined in 11 CFR 100.26. Under this rule, when someone such as an individual, political committee, labor organization or corporation pays a fee to
The revised definition of “public communication” comports with the
The forms of mass communication enumerated in the definition of “public communication” in 2 U.S.C. 431(22), including television, radio, and newspapers, each lends itself to distribution of content through an entity ordinarily owned or controlled by another person. Thus, for an individual to communicate with the public using any of the forms of media listed by Congress, he or she must ordinarily pay an intermediary (generally a facility owner) for access to the public through that form of media each time he or she wishes to make a communication. This is also true for mass mailings and telephone banks, which are other forms of “public communication” under 2 U.S.C. 431(22). A communication to the general public on one's own website, by contrast, does not normally involve the payment of a fee to an intermediary for each communication.
The cost of placing a particular piece of political commentary on the Web is generally insignificant. The cost of such activity is often only the time and energy that is devoted by an individual to share his or her views and opinions with the rest of the Internet community. In this respect, a communication through one's own website is analogous to a communication made from a soapbox in a public square. There is no evidence in the legislative history of BCRA of a Congressional intent to regulate individual speech simply because it takes place through online media.
Communications placed for a fee on another person's website, however, are analogous to the forms of “public communication” enumerated by Congress in 2 U.S.C. 431(23), particularly in light of the growing popularity of Internet advertising. 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 33.9 percent between the third quarter of 2004 and the third quarter of 2005 and reached $3.1 billion for the third quarter of 2005.
Moreover, because Congress did not include the Internet in the list of media enumerated in the statutory definition of “public communication,” an Internet communication can qualify as a “public communication” only if it is a form of advertising and therefore falls within the catch-all category of “general public political advertising.”
The Commission notes that this definition of “public communication” encompasses the types of advertising that some commenters believed should be covered, such as payments by anyone on behalf of a candidate or political committee for advertising on another person's website. As discussed below, this rule should be read together with other existing regulations regarding coordinated and independent expenditures and communications by corporations, labor organizations, and political committees.
On the Internet, where individuals can build blogs and other websites for free, an individual can communicate with the general public at little or no cost. However, this is not true in the case of paid advertising on another person's website. For example, one of the commenters operates a website and sells advertising space for between $1,300 and $5,000 per week.
Three commenters requested a clarification regarding the proposed rule's exclusion of all Internet “communications” with the exception of certain paid “announcements,” and asked whether the Commission intended to attach any significance to the use of “announcements” instead of “communications” in the exception. The Commission did not intend any distinction through the use of different terms. To avoid confusion, the Commission has substituted “communication” in place of “announcement” in the final rule.
One of the commenters suggested adding a content requirement to the Commission's definition of “public communication” by substituting the term “express advocacy”
A different commenter suggested substituting “advertising” in place of “communication.” The Commission is not adopting this suggestion because it is circular and could inject ambiguity into the definition of “public communication.” The result of the commenter's proposed change would be that “Internet
Several commenters argued that low-cost “pay-per-click” ads are too difficult to value because the cost of the advertisement is often variable, measured after the fact, and too low to warrant regulation as a “public communication.” For example, one commenter pointed to advertising opportunities available for $10–$25 per week through BlogAds.com. Commenters urged the Commission to revise the definition of “public communication” to capture only paid Internet ads that cost more than a certain threshold dollar amount. One of these commenters recommended that the Commission seek additional comment to determine the appropriate threshold amount and to index that resulting amount for inflation or re-examine the amount on a regular basis.
The Commission is not establishing a minimum threshold amount in the final rule. There is no stated threshold payment amount in the statutory definition of “public communication,” and it is not clear on what statutory basis the Commission could establish one. Nor was the Commission able to establish a record that would justify a particular threshold. Congress could have chosen, but did not, to establish a specific threshold cost below which an advertisement would not be a “public communication.” Thus, even late-night advertisements on small radio stations, low-cost classified ads in small circulation newspapers, and low-cost billboards in relatively remote areas are forms of “public communication” under 2 U.S.C. 431(13). Accordingly, all Internet communications placed for a fee on another person's Web site qualify as “public communications.”
Nevertheless, as a matter of enforcement policy, the Commission may exercise prosecutorial discretion regarding “public communications” on the Internet that involve insubstantial advertising charges. The amount claimed to have been spent in violation of law is always a factor in the Commission's enforcement decisions, and here, the Commission will be additionally mindful of the importance of minimizing any potential regulatory burden on the use of the Internet.
One commenter requested that the Commission clarify that the person who makes a “public communication” is the person seeking to place an Internet advertisement on another person's Web site, not the person controlling the Web site on which the advertisement appears. The Commission agrees that this is the intended operation of the rule and notes that the regulations that incorporate the term “public communication” clearly regulate the person paying for the “public communication.”
In the
In light of the evolving nature of Internet communications, the Commission is not explicitly excluding from the definition of “public communication” any particular software or format used in Internet communications. The final rules already exclude ordinary blogging activity from the definition of “public communication” because blog messages are not placed for a fee on another person's Web site. Thus, an explicit exclusion focused on “blogging” is not only unnecessary but also potentially confusing to the extent that it implies that other forms of Internet communication, such as “podcasting” or e-mailing, might be regulated absent an explicit exclusion for each different form of Internet communication.
The revision to the definition of “public communication” does not affect the regulations governing corporate or labor organization communications within and outside of its restricted class,
The Commission concludes that it should. There is no basis in the Act or the
The Commission agrees that the relationship between a third-party advertiser and members of a corporation's or labor organization's restricted class, or members of a membership organization, is not sufficiently distinctive to warrant a special exception to the definition of “public communication.” Therefore, a paid Internet advertisement is a “public communication” even if the advertisement is available only to the restricted class of a corporation or labor organization, or the members of a membership organization.
The definition of “public communication” proposed in the
The Commission does not consider e-mail to be a form of “general public political advertising” because there is virtually no cost associated with sending e-mail communications, even thousands of e-mails to thousands of recipients, and there is nothing in the record that suggests a payment is normally required to do so.
In addition, Congress does not view e-mail in the same manner as mass mailings. The House of Representatives' franking rules place various franking restrictions on an “unsolicited mass communication,” which relies on a threshold (500 or more communications) that is almost identical to the threshold in “mass mailing” at 2 U.S.C. 431(23). Although mass e-mail communications were subject to the restrictions at the time BCRA was enacted, on September 5, 2003, the Committee on House Administration revised its own franking rules to remove mass e-mail communications from the list of “unsolicited mass communications”
Under the Commission's revised rules at 11 CFR 100.26, posting a video on a Web site does not result in a “public communication” unless it is placed on another person's Web site for a fee. Nevertheless, one group of commenters called on the Commission to clarify the treatment of expenses by State, district or local party committees for the production costs of videos and other content displayed only on those committee's own Web sites. The commenters observed that the Commission generally treats the costs of producing campaign-related materials as subject to the same funding limits and source prohibitions as the costs of distributing the materials. For example, the direct costs of producing an “electioneering communication” are treated the same as the costs of distributing the communication and are included within the costs of that communication. 11 CFR 104.20(a)(2) (“costs charged by a vendor, such as studio rental time, staff salaries, costs of video or audio recording media, and talent”).
Because the Commission is promulgating regulations that will place funding limits and source prohibitions on some specific content when it is placed for a fee on a third-party's Web site, a State party committee that pays to produce a video that PASOs a Federal candidate will have to use Federal funds when the party committee pays to place the video on a Web site operated by another person. This is entirely consistent with how the party committee would be required to pay for a communication that it distributes through television or any other medium that is a form of “public communication.” In such circumstances, the party committee must pay the costs of producing and distributing the video entirely with Federal funds.
Although the revised definition of “public communication” encompasses only those Internet communications that are placed for a fee on another person's Web site, the NPRM sought comment on whether the definition should be further expanded to encompass all Web sites of State, district, and local party committees. The Commission concludes that it should not.
BCRA defines “Federal election activity” to include “a
In the
One commenter supporting the proposed rule argued that it would be difficult, if not impossible, to identify a severable “Federal” portion of a State party committee Web site in light of a State party committee's frequent changes to its Web site content. Not only would the determination of the appropriate portion require a snapshot of a Web site at one particular time that would render the result somewhat arbitrary and inaccurate in light of the frequently changing content on the Web site, but it could also be easily manipulated because of the ease and low cost of generating new Web pages. For example, any percentage-based system (percentage of Web pages or Web space dedicated to Federal candidates) would require a calculation of the total number of Web pages or files comprising the party committee Web site. The logistical hurdles to this approach, coupled with the difficulty in determining the costs to be allocated, underscore the Commission's decision not to proceed in this fashion.
The commenter also warned that treating a State, district, or local party committee Web site as a “public communication” would deter these party committees from featuring Federal candidates or participating in “generic campaign activity” at all on their Web sites. The commenter explained that even if a party committee's Web site PASOs a Federal candidate on only a small portion of its Web site, such as a few lines on one Web page for a period of a few days, the committee would have to file monthly reports with the Commission for the remainder of the calendar year.
Three other groups of commenters, however, advocated for a definition of “public communication” that included the individual Web sites of State, district, and local party committees. They argued that the term “general public political advertising” should be defined differently with respect to different speakers, applying a broad definition of “general public political advertising” to encompass less activity by individuals, but more Internet activity by State, district, and local party committees, other political committees, corporations, and labor organizations.
The Commission disagrees with these latter commenters and is not including content placed by a State, district, or local party committee on its own Web site within the definition of “public communication.” As explained above, a political party committee's Web site cannot be a form of “public communication” any more than a Web site of an individual can be a form of “public communication.” In each case, the Web site is controlled by the speaker, the content is viewed by an audience that sought it out, and the speaker is not required to pay a fee to place a message on a Web site controlled by another person.
More importantly, Congress defined “public communication” in terms of the types of media used to convey a message (
The definition of “public communication” at 2 U.S.C. 431(22) is just that: a definition. Congress could have, but did not, define the “public communication” differently with respect to different speakers. Instead, Congress chose to distinguish between different speakers only when establishing the consequences of making a “public communication.” The different treatment of different speakers is therefore provided separately in the Act, rather than in the definition of “public communication” itself.
BCRA defines “generic campaign activity” as “campaign activity that promotes a political party and does not promote a candidate or non-Federal candidate.” 2 U.S.C. 431(21). In 2002, as part of a rulemaking implementing BRCA, the Commission defined “generic campaign activity” to mean “a
As noted above, the
The Commission is addressing the
Two commenters addressed the Commission's proposal to retain the current definition of “generic campaign activity.” Both commenters urged the Commission to adopt a definition that includes activities beyond “public communications.” One commenter suggested that the proposed definition of the term “generic campaign activity” would improperly narrow the application of the term, thereby permitting State, district, and local party committees to use non-Federal funds for many activities that promote the political party (and thereby indirectly promote the party's Federal candidates) because the promotion does not occur in a “public communication.” Specifically, this commenter urged the Commission to adopt a broader definition, one covering “
The Commission does not believe that expanding the definition of “generic campaign activity” beyond “public communication” is a sound policy decision or the result required by the Act. First, the Commission has not seen any evidence that its 2002 definition of “generic campaign activity” has led to circumvention of the Act or fostered corruption or the appearance thereof,
The commenters also argued that the use of the term “public communication” creates a definition of “generic campaign activity” that is too narrow because it does not cover all communications, specifically “mailing and phone banks directed to fewer than 500 [sic] people.” The plaintiffs in
Therefore, the Commission has decided to retain the current definition of “generic campaign activity” at 11 CFR 100.25. The final rule is unchanged from the language proposed in the
To be a “coordinated communication” or a “party coordinated communication,” a communication must be a “public communication” as defined in 11 CFR 100.26.
By including Internet advertising placed for a fee on another person's website in the definition of “public communication” in 11 CFR 100.26, the Commission is addressing the deficiency identified by the
In the
The Commission would also like to reiterate that current regulations at 11 CFR 100.52(d)(1) make clear that the provision of goods or services “without charge or at a charge that is less than the usual or normal charge for such goods or services” is a contribution. The Commission does not view the “public communication” rule it is promulgating to permit vendors who normally charge for advertising space to provide such advertising space at a reduced charge or free of charge without making a contribution.
While the Commission recognizes that online business practices for the charging of advertising space vary greatly from one website to the next, the Commission would also like to make clear that when the customary business practice of a particular website regarding the payment for space is not followed, the vendor is making an in-kind contribution. This is similarly the case when any organization transfers to a political committee a tangible asset, such as an e-mail list. There is no need to show that a coordinated communication resulted from such a transfer for the actual asset to be an in-kind contribution to that committee.
The Commission sought comment about the republication of candidate campaign materials on the Internet. Under the existing coordinated communication rules, the content prong can be satisfied by 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.” 11 CFR 109.21(c)(2). Several commenters urged the Commission to ensure that the republication of content from a candidate's website, or the republication of other campaign materials prepared by candidate, would not result in a “coordinated communication” when the republication occurs on a blogger's or individual's own website.
Testimony submitted during the rulemaking indicated that the approach outlined in the
The revision to the definition of “public communication” in 11 CFR 100.26 adequately addresses those commenters' concerns, so no changes are required to the definition of “coordinated communication.” The definition of “public communication” does not encompass any content, including republished campaign material, that a person places on his or her own website. Therefore, a person's republication of a candidate's campaign materials on his or her own website, blog, or e-mail cannot constitute a “coordinated communication.”
The Commission is taking this approach partly in recognition of the ease with which individuals are able to transmit information over the Internet. Exchanging hyperlinks, forwarding e-mail, and attaching downloaded PDF files are common ways most individuals who use the Internet exchange information. The Commission is taking this opportunity to make clear that such activity would not constitute in-kind contributions. The Commission notes that Senator Russ Feingold, one of BCRA's sponsors, stated recently that “linking campaign Web sites, quoting from, or republishing campaign materials and even providing a link for donations to a candidate, if done without compensation, should not cause a blogger to be deemed to have made a contribution to a campaign or trigger reporting requirements.”
However, if a person pays to republish a candidate's campaign materials on another person's website, a “public communication” would result under revised 11 CFR 100.26, and such paid republication would therefore satisfy the content prong of the three-pronged “coordinated communication” test. For example, if a candidate pays to place a banner advertisement on the WashingtonPost.com homepage for one week, and then a different person pays the WashingtonPost.com for the continued display of the same advertisement for an additional week, the content prong of the “coordinated communication” test would be satisfied. The Commission notes, however, that satisfaction of the content prong does not, in and of itself, translate into a coordinated communication finding. The conduct prong must also be satisfied.
The Commission also notes that this provision does not supersede the limitations and prohibitions placed on disbursements for communications by corporations and labor organizations under 2 U.S.C. 441b and 11 CFR Part 114.
The Commission's disclaimer rules promulgated in 2002 apply to “public communications,” as defined in 11 CFR 100.26, as well as to two specified additional types of Internet communications: unsolicited electronic mail of more than 500 substantially similar communications and Internet websites of political committees available to the general public.
Whether a “public communication” requires a disclaimer depends on who makes the “public communication” and what the “public communication” says. Under the 2002 rule, a political committee must include a disclaimer on any “public communication” for which it makes a disbursement, as well as on all of its publicly available websites and on all substantially similar, unsolicited e-mail communications to more than 500 people.
Although the disclaimer rule was not at issue in
Moreover, Congress has required disclaimers for all forms of “general public political advertising” that contain certain content or are paid for by a political committee. 2 U.S.C. 441d(a). As the Commission explained in its original post-BCRA disclaimer rulemaking, the use of the same catch-all phrase in the definition of “public communication” and the disclaimer requirements “should be interpreted in a virtually identical manner.”
In their comments, the Congressional sponsors of BCRA urged the Commission to retain the current additional requirement that all political committee websites include disclaimers. The Commission did not receive any other comments specifically addressing the disclaimer requirement for political committee websites, and did not propose changing that requirement in the
This treatment of political committee websites is consistent with Congress's broader disclaimer requirements for political committees. In 2 U.S.C. 441d(a), Congress required a disclaimer “[w]henever a political committee makes a disbursement” for a class of communications, regardless of the content of the communication. In contrast, for all other persons, Congress only required a disclaimer if the communication contains specific content, such as a solicitation of contributions or a message expressly advocating the election or defeat of a clearly identified candidate for Federal office.
In the
The commenters had mixed reactions to the Commission's proposal. Although they generally supported limiting the disclaimer requirement for e-mail communications to e-mail communications sent to a purchased or rented list, many commenters raised concerns about the proposed definition of “unsolicited e-mail.” One commenter asserted that the proposed definition would be confusing, because it differed from the commonly accepted meaning of the term “unsolicited e-mail,” which is not limited to e-mail communications sent to addresses purchased from a third party. A second commenter felt that the proposed definition was too narrow, and urged the Commission to expand it to include communications sent to an e-mail list provided by a candidate or political committee, regardless of whether the list was provided as part of a commercial transaction. A third commenter felt that the proposed definition was too broad, and urged the Commission not to require disclaimers on e-mail involving less than some minimum cost. A fourth commenter felt that the Commission should not attempt to regulate unsolicited e-mail at all, because of the lack of evidence that political e-mail was “a tool of big money” or otherwise harmful, while a fifth commenter urged the Commission to require disclaimers on all e-mail sent by any candidate, political party committee, political committee, or third party who “paid to send electioneering e-mail.”
Commenters also raised concerns about the quantity threshold (
Several commenters voiced concerns about implementing the Commission's proposal. One commenter, for example, raised the issue of whether disclaimers would be permanently required for any e-mail communication sent to addresses originally acquired through a commercial transaction. Noting that his and other organizations often rented lists of e-mail addresses, the commenter asked, “Does that mean that four months down the line, when we've been having ongoing communication [with a person whose e-mail address was on the rented list,] that because we rented the list originally, and the name was produced through a rented list[,] that * * * we have to put a disclaimer on e-mail to [that person]?” The commenter also noted that the proposed rule could raise recordkeeping issues for organizations that obtain e-mail addresses through a combination of purchase or rental and other means.
Commenters also raised concerns about enforcing the disclaimer requirement on e-mail, particularly given the high volume of e-mail traffic and the low cost of sending large numbers of e-mail communications. In addition, some commenters questioned the Commission's rationale for requiring individuals to place disclaimers on unsolicited e-mail communications containing express advocacy or soliciting contributions, but not to require disclaimers on Internet blogs containing the same message. Several commenters suggested that the Commission simply eliminate the disclaimer requirement for e-mail communications.
The Commission agrees with some of the concerns expressed by the commenters and has decided to change 11 CFR 110.11(a) by eliminating the requirement that disclaimers appear on e-mail communications by persons other than political committees.
A political committee, however, must continue to include a disclaimer whenever it sends more than 500 substantially similar e-mail communications. As noted above, Congress requires disclaimers on a broader class of communications for political committee than for all other persons. Since 2002, the Commission has required disclaimers for “unsolicited electronic mail of more than 500 substantially similar communications.” 11 CFR 110.11(a). The Commission notes that political committees have generally complied with this requirement, and that the inclusion of a disclaimer statement poses only a minimal burden for political committees. Also, the Commission is not aware of significant concerns that might warrant the removal of this requirement for political committees at this time. However, in light of confusion that many commenters expressed regarding the meaning of “unsolicited e-mail,” the Commission is removing the requirement that e-mail be “unsolicited.”
The Commission notes that e-mail communications by corporations and labor organizations are otherwise regulated by 11 CFR Part 114.
The Commission is making two other changes to 11 CFR 110.11(a) for purposes of clarity. First, the Commission is deleting the first
The Commission invited comments on whether it should revise the disclaimer rule in 11 CFR 110.11(a) to require bloggers to disclose payments from a candidate, a political party, or a political committee. The Commission did not propose any change because current Commission rules at 11 CFR 110.11(a) already require a political committee to disclose this type of disbursement on its publicly available reports filed with the Commission.
All but one of the comments received on this subject supported the Commission's proposed approach that would not require bloggers to disclose payments received from candidates. Typical of the reaction was this comment: “The ethics of taking money to express opinions without disclosing those payments can certainly be questioned. But for purposes of the election laws, * * * no disclaimer should be required. Payments by campaigns are disclosed by campaigns. To require more of bloggers when others who receive payments from campaigns are not subject to similar disclosure requirements would not be fair.”
The Commission agrees that the Act does not require a disclaimer when a blogger or other person accepts payment from a Federal candidate. Accordingly, it is not changing the disclaimer rule to require bloggers to disclose payments from a candidate, a political party committee, or other political committee. Please note, however, that disbursements for particular communications, as opposed to more generalized payments to bloggers for consulting or other services, might still require disclaimers. For example, if a candidate or political committee pays a fee to place an advertisement on the website of a blogger, the advertisement would require a disclaimer because it would be a disbursement for a “public communication” by a political committee.
The term “public communication” is also used in 11 CFR 106.6(b) and (f) (allocation of expenses between Federal and non-Federal activities by SSFs and nonconnected committees) and 11 CFR 300.2(b)(4) (definition of “agent” for non-Federal candidates). Thus, the revisions to the definition of “public communication” in amended 11 CFR 100.26 affect the application of these two regulations.
In 2004, the Commission revised its allocation regulations at 11 CFR 106.6 governing the source of funds for certain “public communications” by SSFs and nonconnected committees. Whenever either of these entities pays for a “public communication” that (1) refers to a political party, but does not refer to any clearly identified Federal or non-Federal candidate, or (2) refers to one or more clearly identified Federal candidates, the SSF or nonconnected committee must pay for the communication entirely with Federal funds or by allocating such expenses between its Federal and non-Federal accounts in accordance with 11 CFR 106.6(b) and (f).
In the
The Commission received two comments addressing this issue. Both urged the Commission not to apply the allocation rules in section 106.6 to communications over the Internet. Both comments expressed concern about whether it would be feasible to ascertain the costs of the communications to which the allocation rules would apply.
Because the revised definition of “public communication” covers only paid Internet advertising placed on another person's website, and application of the section 106.6 allocation rules to these communications will be based on readily determinable costs, the commenters' concerns are resolved by the new definition in 11 CFR 100.26. The cost of Internet advertising included within the revised definition of “public communication” will be as discrete and readily identifiable as the costs of other “public communications,” and application of the section 106.6 allocation rules to these Internet communications will therefore not be any more complex than for other forms of communication covered in the definition of “public communication.” Moreover, the costs of paid Internet advertising must be allocated under 11 CFR 106.6 only if the SSF's or nonconnected committee's advertising refers to a political party or a clearly identified Federal candidate.
Therefore, the Commission is not amending the language of the allocation rules in 11 CFR 106.6. All SSFs and nonconnected committees must continue to use Federal funds to pay for all covered forms of “public communication,” which now also includes paid Internet advertising placed on another person's website.
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.
In the
The Commission believes that no further revisions to the definition of “agent” in 11 CFR 300.2(b)(4) are necessary to address the effect of the revised definition of “public communication” in 11 CFR 100.26. The definition of “agent” was based on the anticipated scope of a principal's activities. Now that the principal (
The Act and Commission regulations currently exempt certain activities by individuals from the definitions of “contribution” and “expenditure.”
The Internet has changed the way in which individuals engage in political activity by expanding the opportunities for them to participate in campaigns and grassroots activities at little or no cost and from remote locations. Accordingly, in the
All of the numerous commenters addressing this issue supported the Commission's proposal and favored a broad exemption from regulation for uncompensated Internet activity by individuals. The commenters affirmed that individuals currently use the Internet to engage in both individual and collective grassroots political activity. As one commenter stated, “[t]he Internet provides individuals with the ability to engage in widely disseminative political discourse without requiring the expenditure of large sums of money.” Another commenter stated that campaigns in the 2004 election cycle “relied to an unprecedented degree on using the Internet as an organizing tool, both financially as well as [for] an unprecedented number of volunteers who came to the campaign through the Internet.” This commenter noted that “[p]eople who volunteered through the Internet * * * were volunteering not because they thought they were going to get some job in the administration, not because they wanted to be close to the center of action * * * [but] because they wanted to make a difference.” A different commenter suggested that “[i]ndividual Americans should be able to engage in election related political speech online and spend reasonable sums of their own money to support that speech, without having to disclose their identity, worrying about whether they are violating campaign finance laws, or having to hire a lawyer to advise them.”
One commenter summarized the general benefit to be derived from the proposed exceptions: “[a]doption of this rule would in itself address the vast majority of concerns and objections that have been expressed about this rulemaking. This rule would make clear, appropriately so, that individuals engaging in unfettered political discourse over the Internet using their own computer facilities (or those publicly available) would not be subject to regulation under the campaign finance laws, whether or not such activities are coordinated with a candidate.”
After considering all the comments, the Commission is adding new 11 CFR 100.94 and 100.155, which together expressly remove Internet activity by an individual or group of individuals from the definitions of “contribution” and “expenditure” when the individual or group of individuals perform uncompensated Internet activities for the purpose of influencing a Federal election.
Although the final versions of 11 CFR 100.94 and 100.155 are structured somewhat differently from the rules proposed in the
In the
The Act does not require that a candidate or political committee formally recognize an individual as a “volunteer” for that individual's activities to be exempt from the definitions of “contribution” and “expenditure.” On the contrary, the plain language of the Act uses the term “volunteer” as relating to the provision of voluntary and uncompensated services, rather than to the formal status of the actor in relation to a campaign.
The Commission agrees. Therefore, the new rules exempt Internet activity by individuals acting both with and without the knowledge or consent of a candidate, authorized committee, or political party committee. The new rules use the phrase “acting independently” to cover any individual who is unknown to, or acting without the consent of, a candidate, authorized committee, or political party, and the phrase “in coordination with” to cover any individual who is a formal or informal volunteer known to, and acting with the consent of, a candidate, authorized committee or political party committee.
Finally, commenters raised concerns that the new rules would not apply to groups of individuals who act collectively. One commenter pointed out that, “While it is true that any ‘group’ comprises individuals, the plain reading of the [proposed] rule suggests that only individuals acting ‘individually’ are protected from regulation of ‘contributions’ or ‘expenditure.' ”
In response to this concern, the Commission in the final rules uses the terms “individual or group of individuals.” Individuals are eligible for the exceptions whenever they engage in Internet activities for the purpose of influencing a Federal election alone or collectively as a group of individuals. For example, if several individuals share the responsibilities of operating a blog or other website, then each individual would be covered under new 11 CFR 100.94 and 100.155. The Commission also notes that a group of individuals will not trigger political committee status through Internet activities covered by the new exceptions because those Internet activities would not constitute contributions or expenditures under the Act.
In the
Even if this activity is done in cooperation, consultation, or concert with a candidate or a political party committee, no contribution or expenditure would result, and neither the candidate nor the political party committee would incur reporting responsibilities. Additionally, if an individual forwarded an e-mail received from a political committee, the forwarding of that e-mail would not constitute republication of campaign materials or be an in-kind contribution. The Commission has chosen to adopt such an approach in the final rules. In doing so, the Commission recognizes the importance of grassroots activity and the role of the Internet. Under the final rules at 11 CFR 100.94 and 100.155, individuals are free to republish materials using the Internet without making a contribution or expenditure. However, the Commission notes that 11 CFR 100.94(e) would not exempt from the definition of “contribution” any “public communication” that arises as the result of the republication of such materials. For example, if an individual downloaded a campaign poster from the Internet and then paid to have the poster appear as an advertisement in the New York Times, the advertisement in the New York Times would not be within the exemption of the final rules.
As was noted above, the Act and Commission regulations exempt certain activities by individuals from the definitions of “contribution” and “expenditure.”
The Commission sought comments, but received none, on whether an exception for individual Internet activity should be extended to individuals who receive some form of payment for their Internet services from a candidate or a political committee. The Commission notes that the Act and Commission regulations exempt only “services provided
Accordingly, these final rules exempt only those Internet services for which an individual does not receive any compensation. Campaign employees, for example, are not eligible for the exceptions in 11 CFR 100.94 and 100.155 for activities for which they are compensated. However, campaign employees are still within this exemption when they engage in uncompensated Internet activities. Moreover, bloggers would not lose eligibility for the exceptions by selling advertising space to defray the operating costs of the blog, but would not be eligible for the exceptions for campaign work for which the blogger is compensated by a campaign committee or any other political committee. For example, if a political committee pays a blogger to write a message and post it within his or her blog entry, the resulting blog entry would not be exempted as “uncompensated Internet activity.” While not exempted under the final rules, such a payment to the blogger would not otherwise restrict the blogger's activities or create an obligation on the part of the blogger to
If a campaign committee or other political committee reimburses an individual for any out-of-pocket costs that the individual may incur in performing Internet activities, such reimbursements do not constitute compensation under the final rules. Accordingly, individuals may be reimbursed by political committees for any out-of-pocket expenses they incur in performing Internet activities and remain within the exemptions in 11 CFR 100.94 and 100.155. If a political committee pays the costs of setting up a website or controls the overall content, however, the website may need to carry an appropriate disclaimer under 11 CFR 110.11(a)(1).
The proposed rules in the
Some commenters opposed this proposed structure as “overly lengthy and complicated in part because the proposed rule tries to predict how and where individuals will be using computers.” Some of these commenters also complained that distinguishing between sources of equipment unnecessarily complicated the proposed rules. “These individuals and volunteers should use whatever computer is normally available to and used by them,” stated one commenter. This commenter also stated that “[t]he question is not which computer is used, but whether it is used in the course of uncompensated individual and volunteer activity.”
The Commission agrees. Distinguishing between sources of computer equipment and locations where the Internet activities occur could lead to anomalous results. For instance, the proposed rules may have been interpreted to exempt an individual's Internet activity if the individual used a neighbor's computer in the individual's own home or in an Internet cafe
As this result was not the Commission's intent, the final rules do not distinguish between sources of computer equipment nor locations where the Internet activities are performed. Under new 11 CFR 100.94 and 100.155, an individual does not make a contribution or expenditure when using equipment or services for uncompensated Internet activities for the purpose of influencing a Federal election, regardless of who owns such equipment or where the equipment is located. The final rules thus avoid disparate treatment of individuals or volunteers who may not be able to afford the purchase or maintenance of their own computers and websites and explicitly protect individuals who may borrow a computer from a friend, neighbor, family member, or anyone else to engage in political activity.
In the rule proposed in the
The final rules encompass all of the same activity covered by proposed 11 CFR 100.94 and 100.155, but also include the phrase “and any other form of communication distributed over the Internet.” The Commission added the phrase “and any other form of communication distributed over the Internet” to ensure that future advances in technology will be encompassed within the final rules. For example, the new rules not only cover such things as sending or forwarding electronic messages; providing a link or other direct access to any person's
The proposed rules focused on exempting an individual's use of “computer equipment and services” for activities on the Internet and listed examples of the types of computer equipment and services covered by the proposed rules. Specifically, paragraphs (c) of both proposed 11 CFR 100.94 and 100.155 stated that “computer equipment and services” includes, but is not limited to, computers, software, Internet domain names, and Internet Service Providers (ISP).
The Commission has adopted the language in the
The Commission notes that while individuals incur no liability for using equipment and services in the course of their uncompensated political activity, this rule change does not exempt all political activity involving the use of technology from regulation. Therefore, for example, a political committee's purchase of computers for individuals to engage in Internet activities for the purpose of influencing a Federal election, remains an “expenditure” by the political committee. Additionally, a corporation would make a prohibited in-kind “contribution” and a prohibited “expenditure” by providing software and Internet access for the specific purpose of enabling its employees to influence a Federal election through political Internet activities.
Corporations and labor organizations are generally prohibited from making “contributions” or “expenditures” in connection with any Federal election. 2 U.S.C. 441b. In the
All commenters who addressed this topic supported exempting Internet activity by incorporated bloggers from the definitions of “contribution” and “expenditure.” Some commenters observed that bloggers often incorporate mainly for tax reasons or to limit their liability for the operation of their blogs. “Every month now, somebody threatens to sue me,” stated one blogger who indicated that the popularity of his website and the nature of the political opinions he expresses on his blog made it necessary for him to incorporate for his own legal protection.
The Commission agrees that providing an exception that applies to all individuals, whether incorporated or unincorporated, is the best approach. Therefore, individuals who choose to incorporate are also eligible for the new exceptions in 11 CFR 100.94 and 100.155 for Internet activities by individuals. Although the activities of some incorporated bloggers may also be exempt under the media exemption (discussed below), the separate exceptions for individual activity may reach some incorporated entities that are not acting within the scope of the media exemption or that are not press entities at all.
The purposes of the Act would not be furthered by prohibiting individuals' Internet activities simply because an individual incorporates for liability or tax reasons. The Supreme Court has stated that the Act's prohibitions on corporate expenditures and contributions arise from “Congress's concern that organizations that amass great wealth in the economic marketplace not gain unfair advantage in the political marketplace.”
Although all commenters who discussed this issue agreed that Internet activity by individuals who choose to incorporate should be treated the same as Internet activity by unincorporated individuals, the commenters disagreed on the scope of such treatment. Some commenters noted that the Commission permits political committees to incorporate “for liability purposes only,”
The Commission believes that the best approach to creating an exception tailored to individuals engaged in Internet activity who choose to incorporate, including bloggers, is to focus on the activities of the resulting corporation, rather than delving into the reasons for incorporation. The result of such an approach is that an individual who engages in Internet activity after incorporating is treated the same under the new exceptions as an unincorporated individual who engages in similar Internet activity.
Accordingly, new 11 CFR 100.94(d) and 100.155(d) provide that the exceptions in sections 11 CFR 100.94(a) and 100.155(a) apply to a corporation that meets three criteria: (1) It is wholly owned by one or more individuals; (2) it engages primarily in Internet activities; and (3) it does not derive a substantial portion of its revenues from sources other than income from its Internet activities. The Commission recognizes that incorporated bloggers and other similarly incorporated individuals often generate revenue primarily through the sale of advertising space on their own websites or through other Internet activities, such as providing subscription and membership services, and may also generate ancillary revenue from non-advertising sources, such as T-shirts, mugs, and similar merchandise. The third requirement is therefore added to preserve the exception for such incorporated bloggers and similar corporations, without creating an overly broad exception to the definitions of “contribution” and “expenditure” that would encompass the activities of any corporation engaged in online activities merely as a platform for other commercial activities.
In the
The Commission has decided to adopt this approach. Accordingly, new paragraphs 11 CFR 100.94(e)(1) and 100.155(e)(1) state that the new rules exempt nominal payments for a “public communication,” as defined in 11 CFR 100.26, from the definitions of “contribution” and “expenditure.” The Commission notes, however, that a payment for a “public communication” would not necessarily result in a contribution or expenditure just because it is not exempted by one of the new exceptions; only those payments made for the purpose of influencing a Federal election or “in connection with” a Federal election would result in a contribution or expenditure.
The allowance for the payment of a nominal fee in connection with uncompensated campaign activity on the Internet is consistent with the rules as proposed in the
In the
In the Act, Congress exempted from the definition of “expenditure” costs associated with “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(9)(B)(i). This exemption, commonly known as the “media exemption,” recognizes “the unfettered right of the newspapers, television networks,
In determining whether the media exemption applies, the Commission has traditionally applied a two-step analysis. First, the Commission asks whether the entity engaging in the activity is a press entity as described by the Act and Commission regulations. Second, in determining the scope of the exemption, the Commission considers: (1) Whether the press entity is owned or controlled by a political party, political committee, or candidate; and (2) whether the press entity is acting as a press entity in conducting the activity at issue (
In the
The Commission invited comment generally on the proposed changes to the media exemption. The Commission also asked a number of specific
Thirty-seven of the comments filed in response to the
The commenters' views on regulating bloggers were more diverse. While all commenters who addressed this topic agreed that the media exemption should extend to at least some bloggers, the commenters differed with respect to whether a blanket exemption should be created to cover all bloggers. At one end of the spectrum were those commenters who believed that “all bloggers, whether big, small, incorporated, or moonlighting, deserve the media exemption.” They opined that online news provided by blogs is as “vibrant and vital” as any offline publishing; that blogs satisfy public information needs not met by traditional media; that it would be impractical for the Commission to “police” bloggers; and that it would be “harmful” for the Commission to draw lines between individual bloggers.
Several commenters explicitly equated bloggers to the proverbial speaker on a soapbox in the town square, and argued that any blogger who publishes “campaign-related” opinions should be shielded from regulation under the media exemption. One commenter suggested that the Commission exempt all bloggers from financial reporting and coordination requirements, while still requiring them to disclose on their websites any payments that they receive from candidates or political committees for taking a particular position in connection with a Federal election.
Several commenters recommended against exempting bloggers as a class from regulation. One commenter observed that “crucial questions” must be answered before any blogger or online news source qualifies for the media exemption, such as whether the entity's resources are “devoted to collecting and disseminating information to the public”; whether the entity “inform[s] and educate[s] the public, offer[s] criticism, and provide[s] [a] forum[] for discussion and debate”; and whether the entity “serve[s] as a powerful antidote to governmental power abuses and hold[s] officials accountable to the people.” Another commenter urged the Commission to consider a number of “relevant factors” in determining whether a blogger qualifies for the media exemption, such as whether the blogger receives payments from a campaign; whether the blogger solicits money for candidates; and whether the blogger engages in newsgathering or editorializing.
The Commission has decided to revise 11 CFR 100.73 and 11 CFR 100.132 to clarify that the media exemption applies to media entities that cover or carry news stories, commentary, and editorials on the Internet, just as it applies to media entities that cover or carry news stories, commentary, and editorials in traditional media, such as printed periodicals or television news programs. The Commission is also clarifying that the media exemption protects news stories, commentaries, and editorials no matter in what medium they are published. Therefore, the Commission has added “website” to the list of media in the exemption and is also adding “any Internet or electronic publication” to address publication of news stories, commentaries, or editorials in electronic form on the Internet.
The application of the media exemption to Internet communications is consistent with past instances in which the Commission has extended the media exemption to forms of media that did not exist or were not widespread when Congress enacted the exemption in 1974. For example, in 1996 the Commission changed its rules to make clear that the media exemption also applies to news stories, commentary, and editorials appearing in cable programming.
Similarly, although Congress could not have envisioned the Internet when it created the media exemption more than thirty years ago, much less the revolutionary changes in the area of political communication that the Internet has made possible, the Commission finds it reasonable to conclude that entities providing news on the Internet are precisely the type of “other media” appropriately included within the media exemption. As the Supreme Court noted, “It is not the intent of Congress in [FECA] * * * to limit or burden in any way the First
The Commission finds as a matter of law that the media exemption applies to the same extent to entities with only an online presence as to those with an offline component as well. The Washington Post, New York Times, CNN and other newspapers and broadcast news sources maintain an online presence in addition to their traditional means of distribution and dissemination. Salon.com, Slate.com, and Drudgereport.com operate exclusively online. The Commission concludes that the media exemption applies with full force to all these types of entities.
The Commission has consistently viewed online, Internet-based dissemination of news stories, commentaries, and editorials to be indistinguishable from offline television and radio broadcasts, newspapers, magazines and periodical publications for the purposes of applying the media exemption under the Act. For example, in Advisory Opinion 2004–07, the Commission determined that the media exemption applied to MTV's posting on its website of election-related educational materials and the results of a survey of people's preferences for President of the United States. As the Commission noted, “websites are a common feature of many media organizations. The Commission considers posting news stories, commentaries, and editorials on a press entity's website to be within the entity's legitimate press functions.” Advisory Opinion 2004–07 (MTV, MTV Networks, Viacom, Inc. and Viacom International, Inc.). The Commission also concluded that the media exemption would apply to MTV's contemporaneous announcement and publication of survey results to the public via e-mail and text messages.
The Commission has considered whether an Internet video programming operator that webcast content was entitled to the media exemption when it provided coverage of the Democratic and Republican National Conventions over the Internet. In Advisory Opinion 2000–13 (Ampex Corporation and iNEXTV Corporation), iNEXTV did not create programming under its own name, but rather operated its own network of specialized news and information sites that offered direct access to governmental and business news events, interviews, and commentary with political figures, and a forum where viewers could state their opinions on specific issues via computer. The Commission concluded that iNEXTV's activities on the Internet were viewable to the general public and were akin to a periodical or news program. Therefore, iNEXTV's proposed gavel-to-gavel coverage of the Democratic and Republican National Conventions fit into the categories of news story and commentary that are exempted from the definition of “contribution” and “expenditure” under the Act.
The Commission has also made clear that the press exemption applies to a wide variety of online and offline activities. In Advisory Opinion 2005–16, the Commission determined that the media exemption applied to an entity whose Internet sites were publicly available and carried news stories, commentaries, and editorials that supported or opposed Federal candidates—even where the entity was founded and controlled by a former Federal officeholder and a former State party executive director. The Commission has specifically determined that the press exemption applies regardless of whether the news story, commentary, or editorial contains express advocacy. Media entities routinely endorse candidates, and the media exemption protects their right to do so.
The Commission has also concluded that press entities do not forfeit the press exemption if they solicit contributions for candidates.
Moreover, Commissioners have repeatedly concluded that the media exemption applies without regard to whether programming is biased or balanced.
Commissioners have also concluded that the presence or absence of alleged coordination between a press entity and a candidate or political party is irrelevant to determining whether the Act's press exemption applies. See,
More recently, the Commission has determined that the media exemption applied to a blogger that covered and carried news stories, commentaries, or editorials. In Advisory Opinion 2005–16, the Commission analyzed the Internet activity of Fired Up! LLC (“Fired Up”), an entity that maintained a network of Internet websites but had no offline media presence. The Commission found that a primary function of Fired Up's websites was to provide news and information to readers through commentary on, quotes from, summaries of, and hyperlinks to news articles appearing on other entities' websites and Fired Up's original reporting. The Commission viewed the posting of reader comments to the website as similar to letters to the editor and noted that FiredUp retained editorial control over the content displayed on its websites.
The Commission has decided not to change its rules regarding the media exemption so as to exempt all blogging activity from the definitions of “contribution” and “expenditure.” The Commission believes that such an exemption for one technology-specific category would be both too broad and too narrow: it would apply equally to blogging activity “that [is] not involved in the regular business of imparting news to the public”
The Commission concludes that bloggers and others who communicate on the Internet are entitled to the press exemption in the same way as traditional media entities. This is in keeping with the roles that bloggers play in the way that the public receives their news and information. Bloggers were issued press credentials for the National Nominating Conventions in 2004
The Commission recognizes that the Internet allows for constant, up-to-the-minute reporting and coverage. The Commission has concluded that online providers of news stories, commentaries and editorials are within the press exemption. This conclusion reflects a broad reading of “periodical publication.” In Advisory Opinion 1980–109 (James Hansen), the Commission stated that a “periodical publication” means “a publication in bound pamphlet form appearing at regular intervals (usually either weekly, bi-weekly, monthly or quarterly) and containing articles of news, information, or entertainment.” However, with the advent of the Internet, frequent updating of the content of a website has become commonplace and is not tied to a publishing schedule but to the fast pace of breaking news and the availability of information. The Commission finds that the term “periodical” within the meaning of the Act's media exemption ought not be construed rigidly to deny the media exemption to entities who update their content on a frequent, but perhaps not fixed, schedule. Nor can “periodical publication” be restricted to works appearing in a bound, pamphlet form. To the extent that the conclusions in Advisory Opinion 1980–109 are not applicable to online media, that advisory opinion is hereby distinguished. The Commission notes that media entities such as WashingtonPost.com and Drudgereport.com, as well as many blogs, are updated throughout the day and function consistent with a dynamic definition of periodical publication.
In the
As noted above, corporations and labor organizations are prohibited from making contributions or expenditures, or facilitating the making of contributions by certain persons, in connection with a Federal election. 2 U.S.C. 441b(a); 11 CFR 114.2(a), (b), and (f). However, corporations and labor organizations do not make contributions or expenditures, or facilitate the making of a contribution, by permitting “occasional, isolated, or incidental use” of corporate or labor organization facilities in connection with a Federal election by stockholders and employees of a corporation and officials, members, and employees of a labor organization.
Although section 114.9 provides only general guidance for determining what constitutes “occasional, isolated, or incidental use,”
In the
Comments on the Commission's proposal to amend 11 CFR 114.9 were mixed. Some commenters did not think that the rule needed clarification because the language of the current rule is already flexible enough to cover corporate and labor organization computers and Internet services used for political activity. Others commented that an explicit extension of § 114.9 to cover computers and Internet services would be “appropriate” and “reasonable.” A number of commenters argued that the safe harbor of one hour a week or four hours a month was not adequate for election-related personal Internet activities. As one commenter stated, applying the time limitations of the safe harbor provision to Internet activities “is simply not realistic in today's political environment.”
Many commenters argued that in light of the unique nature of Internet activities and the portable nature of the computers and other facilities needed to conduct these activities, the Commission should treat the use of corporate and labor organization facilities for Internet activities differently from the use of such facilities for other activities. One commenter stated:
In light of these developments, the vast majority of commenters who addressed this topic, including commenters from several reform organizations, argued that the Commission should abolish any time restriction on the use of corporate or labor organization computers and other Internet equipment and services.
The Commission acknowledges that personal use of corporate and labor organization laptops, e-mail, Internet service, and other similar facilities is often permitted, and the Commission agrees with these commenters that it would serve little purpose for Commission regulations to prohibit or overly restrict such common uses of facilities. The Commission agrees with a commenter who said “[c]orporate or labor organization provision of a computer and Internet access is not analogous to the use of a building or facility, either in financial or practical terms. What would be comparable is providing a pen and paper.”
Accordingly, the Commission is amending 11 CFR 114.9 to add new safe harbors specifically addressing the provision of corporate or labor organization facilities for Internet activities.
Thus, the new provisions of 11 CFR 114.9 complement the provisions of 11 CFR 100.94 and 100.155. Under 11 CFR 100.94 and 100.155, individuals are free to use whatever computer and Internet facilities that are otherwise available to them to engage in uncompensated Internet political activities. Under 11 CFR 114.9, corporations and labor organizations may permit access to their computers and Internet facilities so that stockholders, employees, members, and officials may conduct these activities. The final rules make clear that corporations and labor organizations may not condition the availability of their facilities on their being used for political activity or on support for or opposition to any particular candidate or political party.
In the new safe harbors, the Commission is not quantifying a permissible level of use of corporate and labor organization facilities for Internet activities. As one commenter explained, “any organization, union or corporation, is going to have policies that control [the ability of employees or staff to use corporate facilities and union facilities], that restrict [such use] in order for it to do its ordinary business. And [] you can leave it to these organizations acting sensibly that they are not going to have a workplace where anyone can, to an unlimited amount, [at least] on the job, use their facilities for private pursuits, political pursuits, anything unrelated to the organization's mission.” Additionally, because 11 CFR 100.54 applies to the safe harbors at 11 CFR 114.9(a)(2) and 114.9(b)(2), employees must complete their normal work in order to avail themselves of these safe harbors. Thus, individual Internet activities must be undertaken on the individual's own time.
One witness testified that “a lot of us work at all hours of the day, and it's very useful to be able to use the computer at the office for some of our personal work as well, whatever that may be * * * [to be limited to 1 hour per week and 4 hours per month is] basically just forcing people to kind of live an abnormal life.” The reference to 11 CFR 100.54 is meant to address this type of situation and confirm that so
The reference to 11 CFR 100.54 applies to the safe harbors at 11 CFR 114.9(a)(2) and (b)(2). Thus, while there is no specific time limit on Internet activities, employees must complete their normal work in order to avail themselves of these safe harbors. A corporation or labor organization may not subsidize the activity by, for example, reducing an employee's workload to provide extra time for campaign activities at corporate or labor organization expense. Subject to those conditions, there is no ceiling on the amount of time that an employee may spend in a given day or week engaging in online political activities.
In addition to the safe harbors for the use of corporate or labor organization facilities to engage in Internet activities, the Commission is also preserving the one hour per week/four hours per month safe harbors, which will continue to apply across-the-board to usage of all types of corporate and labor organization facilities.
In the
The Commission is also making technical amendments to 11 CFR 114.9 to restructure the format of the existing safe harbor. This change does not alter the substance of the rule or the existing safe harbor, but merely provides a clearer rule structure to accommodate the new safe harbor provision.
The Commission certifies that the attached final rules will not have a significant economic impact on a substantial number of small entities. The basis for this certification is that the individuals and not-for-profit entities affected by these proposed rules are not “small entities” under 5 U.S.C. 601. The definition of “small entity” does not include individuals, but classifies a not-for-profit enterprise as a “small organization” if it is independently owned and operated and not dominant in its field. 5 U.S.C. 601(4).
State, district, and local party committees affected by these proposed rules are not-for-profit committees that do not meet the definition of “small organization.” State political party committees are not independently owned and operated because they are not financed and controlled by a small identifiable group of individuals, and they are affiliated with the larger national political party organizations. In addition, the State political party committees representing the Democratic and Republican parties have a major controlling influence within the political arena of their State and are thus dominant in their field. District and local party committees are generally considered affiliated with the State committees and need not be considered separately.
Separate segregated funds affected by these proposed rules are not-for-profit political committees that do not meet the definition of “small organization” because they are financed by a combination of individual contributions and financial support for certain expenses from corporations, labor organizations, membership organizations, or trade associations, and therefore are not independently owned and operated.
Most other political committees affected by these rules are not-for-profit committees that do not meet the definition of “small organization.” Most political committees are not independently owned and operated because they are not financed by a small identifiable group of individuals. Most political committees rely on contributions from a large number of individuals to fund the committees' operations and activities.
To the extent that any State party committees representing minor political parties or any other political committees might be considered “small organizations,” the number affected by this proposed rule is not substantial. Additionally, the proposed rule preserves the Commission's general exclusion of Internet communications from the scope of regulation, and only State, district, and local political parties and candidates could be subject to different funding requirements for certain communications. Accordingly, to the extent that any other entities may fall within the definition of “small entities,” any economic impact of complying with these rules will not be significant.
Elections.
Campaign funds, Political committees and parties.
Business and industry, elections, labor.
2 U.S.C. 431, 434, and 438(a)(8).
Any cost incurred in covering or carrying a news story, commentary, or editorial by any broadcasting station (including a cable television operator, programmer or producer), Web site, newspaper, magazine, or other periodical publication, including any Internet or electronic publication, is not a contribution unless the facility is owned or controlled by any political party, political committee, or candidate, in which case the costs for a news story:
(a) When an individual or a group of individuals, acting independently or in coordination with any candidate, authorized committee, or political party committee, engages in Internet activities for the purpose of influencing a Federal election, neither of the following is a contribution by that individual or group of individuals:
(1) The individual's uncompensated personal services related to such Internet activities;
(2) The individual's use of equipment or services for uncompensated Internet activities, regardless of who owns the equipment and services.
(b)
(c)
(d) Paragraph (a) of this section also applies to any corporation that is wholly owned by one or more individuals, that engages primarily in Internet activities, and that does not derive a substantial portion of its revenues from sources other than income from its Internet activities.
(e) This section does not exempt from the definition of contribution:
(1) Any payment for a public communication (as defined in 11 CFR 100.26) other than a nominal fee;
(2) Any payment for the purchase or rental of an e-mail address list made at the direction of a political committee; or
(3) Any payment for an e-mail address list that is transferred to a political committee.
Any cost incurred in covering or carrying a news story, commentary, or editorial by any broadcasting station (including a cable television operator, programmer or producer), Web site, newspaper, magazine, or other periodical publication, including any Internet or electronic publication, is not an expenditure unless the facility is owned or controlled by any political party, political committee, or candidate, in which case the cost for a news story:
(a) When an individual or a group of individuals, acting independently or in coordination with any candidate, authorized committee, or political party committee, engages in Internet activities for the purpose of influencing a Federal election, neither of the following is an expenditure by that individual or group of individuals:
(1) The individual's uncompensated personal services related to such Internet activities;
(2) The individual's use of equipment or services for uncompensated Internet activities, regardless of who owns the equipment and services.
(b)
(c)
(d) Paragraph (a) of this section also applies to any corporation that is wholly owned by one or more individuals, that engages primarily in Internet activities, and that does not derive a substantial portion of its revenues from sources other than income from its Internet activities.
(e) This section does not exempt from the definition of expenditure:
(1) Any payment for a public communication (as defined in 11 CFR 100.26) other than a nominal fee;
(2) Any payment for the purchase or rental of an e-mail address list made at the direction of a political committee; or
(3) Any payment for an e-mail address list that is transferred to a political committee.
2 U.S.C. 431(8), 431(9), 432(c)(2), 437d, 438(a)(8), 441a, 441b, 441d, 441e, 441f, 441g, 441h, and 36 U.S.C. 510.
(a)
(1) All public communications, as defined in 11 CFR 100.26, made by a political committee; electronic mail of more than 500 substantially similar communications when sent by a political committee; and all Internet websites of political committees available to the general public.
(2) All public communications, as defined in 11 CFR 100.26, by any person that expressly advocate the election or defeat of a clearly identified candidate.
(3) All public communications, as defined in 11 CFR 100.26, by any person that solicit any contribution.
(4) All electioneering communcations by any person.
2 U.S.C. 431(8), 431(9), 432, 434, 437d(a)(8), 438(a)(8), 441b.
(a)
(1) Stockholders and employees of the corporation may, subject to the rules and practices of the corporation and 11 CFR 100.54, make occasional, isolated, or incidental use of the facilities of a corporation for individual volunteer activity in connection with a Federal election and will be required to reimburse the corporation only to the extent that the overhead or operating costs of the corporation are increased. A corporation may not condition the availability of its facilities on their being used for political activity, or on support for or opposition to any particular candidate or political party. As used in this paragraph,
(i) When used by employees during working hours, an amount of activity which does not prevent the employee from completing the normal amount of work which that employee usually carries out during such work period; or
(ii) When used by stockholders other than employees during the working period, such use does not interfere with the corporation in carrying out its normal activities.
(2)
(i) Any individual volunteer activity that does not exceed one hour per week or four hours per month, regardless of whether the activity is undertaken during or after normal working hours; or
(ii) Any such activity that constitutes voluntary individual Internet activities (as defined in 11 CFR 100.94), in excess of one hour per week or four hours per month, regardless of whether the activity is undertaken during or after normal working hours, provided that:
(A) As specified in 11 CFR 100.54, the activity does not prevent the employee from completing the normal amount of work for which the employee is paid or is expected to perform;
(B) The activity does not increase the overhead or operating costs of the corporation; and
(C) The activity is not performed under coercion.
(3) A stockholder or employee who makes more than occasional, isolated, or incidental use of a corporation's facilities for individual volunteer activities in connection with a Federal election is required to reimburse the corporation within a commercially reasonable time for the normal and usual rental charge, as defined in 11 CFR 100.52(d)(2), for the use of such facilities.
(b)
(1) The officials, members, and employees of a labor organization may, subject to the rules and practices of the labor organization and 11 CFR 100.54, make occasional, isolated, or incidental use of the facilities of a labor organization for individual volunteer activity in connection with a Federal election and will be required to reimburse the labor organization only to the extent that the overhead or operating costs of the labor organization are increased. A labor organization may not condition the availability of its facilities on their being used for political activity, or on support for or opposition to any particular candidate or political party. As used in this paragraph,
(i) When used by employees during working hours, an amount of activity during any particular work period which does not prevent the employee from completing the normal amount of work which that employee usually carries out during such work period; or
(ii) When used by members other than employees during the working period, such use does not interfere with the labor organization in carrying out its normal activities.
(2)
(i) Any individual volunteer activity that does not exceed one hour per week or four hours per month, regardless of whether the activity is undertaken during or after normal working hours; or
(ii) Any such activity that constitutes voluntary individual Internet activities (as defined in 11 CFR 100.94), in excess of one hour per week or four hours per month, regardless of whether the activity is undertaken during or after normal working hours, provided that:
(A) As specified in 11 CFR 100.54, the activity does not prevent the employee from completing the normal amount of work for which the employee is paid or is expected to perform;
(B) The activity does not increase the overhead or operating costs of the labor organization; and
(C) The activity is not performed under coercion.
(3) The officials, members, and employees who make more than occasional, isolated, or incidental use of a labor organization's facilities for individual volunteer activities in connection with a Federal election are required to reimburse the labor organization within a commercially reasonable time for the normal and usual rental charge, as defined in 11 CFR 100.52(d)(2), for the use of such facilities.
(e) Nothing in this section shall be construed to alter the provisions in 11 CFR Part 114 regarding communications to and beyond a restricted class.