12 April 2006
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[Federal Register: April 12, 2006 (Volume 71, Number 70)]
[Rules and Regulations]
[Page 18589-18614]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ap06-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
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[[Page 18589]]
FEDERAL ELECTION COMMISSION
11 CFR Parts 100, 110, and 114
[Notice 2006--8]
Internet Communications
AGENCY: Federal Election Commission.
ACTION: Final Rules and Transmittal to Congress.
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SUMMARY: 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
Shays v. Federal Election Commission, which held that the previous
definition of ``public communication'' impermissibly excluded all
Internet communications. The revised definition of ``public
communication'' includes paid Internet advertising placed on another
person's website, but does not encompass any other form of Internet
communication. The Commission is also re-promulgating without change
its definition of ``generic campaign activity'' and amending the scope
of its disclaimer regulations, both of which incorporate the revised
definition of ``public communication.'' Additionally, the Commission is
adding new exceptions to the definitions of ``contribution'' and
``expenditure'' to exclude Internet activities and communications that
qualify as individual activity or that qualify for the ``media
exemption.'' These final rules are intended to ensure that political
committees properly finance and disclose their Internet communications,
without impeding individual citizens from using the Internet to speak
freely regarding candidates and elections. Further information is
provided in the Supplementary Information that follows.
DATES: Effective Date: May 12, 2006.
FOR FURTHER INFORMATION CONTACT: 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.
SUPPLEMENTARY INFORMATION:
Introduction
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)
(``Shays Appeal''), reh'g en banc denied (Oct. 21, 2005), which
required the Commission to remove the former wholesale exclusion of
Internet activity from its definitions of two terms: ``public
communication'' and ``generic campaign activity.'' In examining issues
relating to Internet communications, the Commission has also decided to
address several of its other rules to remove potential restrictions on
the ability of individuals and others to use the Internet as a low-cost
means of civic engagement and political advocacy.
These final rules follow the publication of a Notice of Proposed
Rulemaking (``NPRM'') on Internet Communications, in which the
Commission sought comments on several proposed revisions to its rules.
See 70 FR 16967 (April 4, 2005). The Commission received more than 800
comments in response to the NPRM, the vast majority of which urged
limited, if any, regulation of Internet activities. Additionally, the
Commission received a letter from the Internal Revenue Service
indicating that ``the proposed rules do not pose a conflict with the
Internal Revenue Code or the regulations thereunder.''
After reviewing the written comments and testimony provided at a
hearing on June 28 and 29, 2005,\1\ the Commission has decided to take
the following six actions: (1) Revise its definition of ``public
communication;'' (2) re-promulgate the definition of ``generic campaign
activity'' without revision; (3) revise the disclaimer requirements;
(4) add an exception for uncompensated individual Internet activities;
(5) revise the ``media exemption;'' and (6) add a new provision
regarding the use of corporate and labor organization computers and
other equipment for Internet activities by certain individuals.
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\1\ The comments and a transcript of the hearing are available
at http://www.fec.gov/law/law_rulemakings.shtml#Internet05.
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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.\2\
This term defines the scope of covered activity for a limited number of
groups who are either already subject to Commission regulation, or who
are coordinating with candidates or political parties who are
themselves currently subject to regulation. Congress did not use the
term ``public communication'' to regulate the vast majority of the
American public's activity on the Internet or elsewhere. Everyday
activity by individuals, even when political in nature, will not be
affected by the changes made in this rulemaking.
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\2\ The change affects only the following regulatory provisions:
the restrictions on funding of Federal election activity by
political party committees and State and local candidates (2 U.S.C.
431(20)); the allocation of costs of certain communications by some
political committees under 11 CFR 106.6(b); the determination that
certain communications must be treated as contributions if
coordinated with a Federal candidate or political party committee
under 11 CFR 109.21 and 109.37; and the requirement to include
disclaimer statements on certain communications pursuant to 11 CFR
110.11.
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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
[[Page 18590]]
substantial advertising fees, the vast majority of the general public
who choose to communicate through the Internet can afford to do so.
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 Shays District decision by focusing exclusively on
Internet advertising that is placed for a fee on another person's
website. In addition, these rules add new exceptions to the definitions
of ``contribution'' and ``expenditure'' to protect individual and media
activity on the Internet.\3\
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\3\ The terms ``contribution'' and ``expenditure'' include
gifts, subscriptions, purchases, payments, distributions, loans,
advances or deposits of money, or anything of value made by any
person for the purpose of influencing any election for Federal
office. See 2 U.S.C. 431(8)(A)(i) and 431(9)(A); see also 11 CFR
Part 100, Subparts B & D.
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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 Shays District decision, the Commission is clarifying and affirming
that Internet activities by individuals and groups of individuals face
almost no regulatory burdens under the Federal Election Campaign Act.
The need to safeguard Constitutionally protected political speech
allows no other approach.
Transmission of Final Rules to Congress
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 Federal Register at least 30 calendar days before they take effect.
The final rules that follow were transmitted to Congress on March 29,
2006.
Explanation and Justification
I. Unique Characteristics and Uses of the Internet
The Internet has a number of unique characteristics that
distinguish it from traditional forms of mass communication.\4\ Unlike
television, radio, newspapers, magazines, or even billboards, ``the
Internet can hardly be considered a `scarce' expressive commodity. It
provides relatively unlimited, low-cost capacity for communication of
all kinds.'' Reno v. ACLU, 521 U.S. 844, 870 (1997). In response to the
NPRM, one commenter noted that a ``computer and an Internet connection
can turn anyone into a publisher who can speak to a mass audience.''
For example, an individual with access to a computer and the Internet
can create a free blog \5\ at sites such as http://www.blogger.com,
http://www.blogeasy.com, spaces.msn.com, or www.typepad.com. Additionally,
because an Internet communication is not limited in duration and is not
subject to the same time and space limitations as television and radio
programming, the Internet provides a means to communicate with a large
and geographically widespread audience, often at very little cost.\6\
Now that many public spaces such as libraries, schools, and coffee
shops provide Internet access without charge, individuals can create
their own political commentary and actively engage in political debate,
rather than just read the views of others. In the words of one
commenter, the Internet's ``near infinite capacity, diversity, and low
cost of publication and access'' has ``democratized the mass
distribution of information, especially in the political context.'' The
result is the most accessible marketplace of ideas in history.
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\4\ See Enrique Armijo, Public Airwaves, Private Mergers:
Analyzing the FCC's Faulty Justification for the 2003 Media
Ownership Rule Change, N.C. L. Rev. 1482, 1494 (May 2004)
(discussing broadcast media and the Internet as ``imperfect
substitutes''); see also Ryan Z. Watts, Independent Expenditures on
the Internet: Federal Election Law and Political Speech on the World
Wide Web, 8 CommLaw Conspectus 149, 160 (Winter 2000) (discussing
Reno v. ACLU, 521 U.S. 844 (1997) and the Internet's differences
from traditional media).
\5\ The word ``blog'' derives from the term ``Web log'' and is
defined as ``an online diary; a personal chronological log of
thoughts published on a Web page.'' Webster's New Millennium
Dictionary of English, available at http://www.dictionary.com (last
visited 3/24/06). People who maintain blogs are known as
``bloggers.''
\6\ See Edward L. Carter, Outlaw Speech on the Internet:
Examining the Link Between Unique Characteristics of Online Media
and Criminal Libel Prosecutions, 21 Santa Clara Computer & High
Tech. L.J. 289, 316-17 (January 2005) (``Internet is unlike
traditional print or broadcast media in that messages can have a
long shelf life--an Internet message can circulate via e-mail or
remain posted somewhere even long after the message's creator has
tried to retract it.'').
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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. See
Reno, 521 U.S. at 869. For example, a broadcast television viewer or
radio listener who turns on his television or radio set is
automatically subjected to the limited, available programming. In
contrast, a website's information is seen only by those who actively
take the steps necessary to find, visit, and view the website.
During 2005, an estimated 204 million people in the United States
used the Internet.\7\ In the first half of 2005, an estimated 67
percent of the adult American population used the Internet.\8\ At the
end of 2004, 87 percent of American teens (ages 12-17, representing the
next generation of voters) were using the Internet,\9\ and on average,
70 million American adults
[[Page 18591]]
logged onto the Internet on a daily basis.\10\
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\7\ See Internet World Stats available at http://www.Internetworldstats.com/stats2.htm
(last visited 3/24/06).
\8\ See Pew Internet & American Life Project, How Women and Men
use the Internet, p. I, (2005) available at http://www.pewInternet.org/pdfs/PIP_Women_and_Men_online.pdf
(last
visited 3/24/06).
\9\ See Pew Internet & American Life Project, Teens and
Technology, p. I (2005) available at http://www.pewInternet.org/pdfs/PIP_Teens_Tech_July2005web.pdf
(last visited 3/24/06).
\10\ See Pew Internet & American Life Project, Trends 2005,
Chapter 4, Internet: The Mainstreaming of Online Life, p. 58 (2005)
available at http://www.pewInternet.org/pdfs/Internet_Status_2005.pdf
(last visited 3/24/06).
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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.\11\
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\11\ See Pew Internet & American Life Project and the University
of Michigan School of Information, The Internet and the Democratic
Debate, p. 2 (October 27, 2004) available at http://www.pewInternet.org/pdfs/PIP_Political_Info_Report.pdf
(last
visited 3/24/06).
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The 2004 election cycle also marked a dramatic shift in the scope
and manner in which Americans used websites, blogs, listservs,\12\ and
other Internet communications to obtain information on a wide range of
campaign issues and candidates.\13\ The number of Americans using the
Internet as a source of campaign news more than doubled between 2000
and 2004, from 30 million to 63 million.\14\ An estimated 11 million
people relied on politically oriented blogs as a primary source of
information during the 2004 presidential campaign,\15\ and 18 percent
of all Americans cited the Internet as their leading source of news
about the 2004 presidential election.\16\
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\12\ A ``listserv'' is a software program that automatically
sends electronic mail messages to multiple e-mail addresses on an
electronic mail list. See, e.g., http://www.lsoft.com/products/listserv.asp
(last visited 3/24/06). The term ``listserv'' is
commonly used, however, to denote the electronic mail list itself or
the automated forwarding to all addresses on the mailing list of an
e-mail sent only to the listserv's e-mail address.
\13\ See Pew Internet & American Life Project, The Internet and
Campaign 2004, available at http://www.pewInternet.org/pdfs/PIP_2004_Campaign.pdf
(last visited 3/24/06).
\14\ See note 9, above, The Internet and Democratic Debate, p.
2. During the same time period, the number of people reporting
television as their primary source of campaign information declined.
Id.
\15\ See Jessica Mintz, When Bloggers Make News--As Their Count
Increases, Web Diarists Are Asking: Just What Are the Rules? Wall
St. J., Jan. 21, 2005 at B1.
\16\ See note 10, above, The Mainstreaming of Online Life, p. 2.
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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.
II. Congressional Action, Commission Action, and the Courts
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 et seq., in various
respects. The Commission implemented these changes in the law through a
series of rulemakings during 2002.
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 \17\ to pay for any
``public communication'' that promotes, supports, attacks or opposes
(``PASOs'') a clearly identified candidate for Federal office. See 2
U.S.C. 431(20)(A)(iii) and 441i(b) and (f); see also 11 CFR
100.24(b)(3) and (c)(1), 300.32(a)(1) and (2), and 300.71.\18\ Congress
defined a ``public communication'' as ``a communication by means of any
broadcast, cable, or satellite communication, newspaper, magazine,
outdoor advertising facility, mass mailing, or telephone bank to the
general public, or any other form of general public political
advertising.'' 2 U.S.C. 431(22). When the Commission promulgated
regulations to implement these BCRA provisions, it explicitly excluded
all Internet communications from its definition of ``public
communication'' and, therefore, none of the Commission's rules
governing the funding of ``public communications'' applied to Internet
communications. See 11 CFR 100.26; Final Rules on Prohibited and
Excessive Contributions; Non-Federal Funds or Soft Money, 67 FR 49064
(July 29, 2002) (``Soft Money Final Rules'').
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\17\ ``Federal funds'' are funds subject to the limitations,
prohibitions, and reporting requirements of the Act. See 11 CFR
300.2(g). ``Non-Federal funds'' are funds not subject to the
limitations and prohibitions of the Act. See 11 CFR 300.2(k).
\18\ There are four types of ``Federal election activity'': Type
1--Voter registration activity during the period that begins on the
date that is 120 days before a regularly scheduled Federal election
is held and ends on the date of the election; Type 2--Voter
identification, get-out-the-vote activity, or ``generic campaign
activity'' conducted in connection with an election in which a
candidate for Federal office appears on the ballot; Type 3--A
``public communication'' that promotes, supports, attacks or opposes
a clearly identified candidate for Federal office; and Type 4--
Services provided during any month by an employee of a State,
district, or local committee of a political party who spends more
than 25 percent of that individual's compensated time during that
month on activities in connection with a Federal election. See 2
U.S.C. 431(20) and 11 CFR 100.24.
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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).\19\ Congress defined
[[Page 18592]]
``generic campaign activity'' as ``campaign activity that promotes a
political party and does not promote a [Federal] candidate or non-
Federal candidate.'' 2 U.S.C. 431(21). The Commission incorporated the
term ``public communication,'' along with its exclusion of Internet
communications, into the definition of ``generic campaign activity'' in
its rules. See 11 CFR 100.25; Soft Money Final Rules.
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\19\ State, district, and local party committees and
organizations may use an allocated mix of Federal funds and ``Levin
funds'' to pay for ``generic campaign activity'' conducted in
connection with an election in which a candidate for Federal office
appears on the ballot (regardless of whether a candidate for State
or local office also appears on the ballot), or the party committee
or organization must pay for the communication entirely with Federal
funds. See 2 U.S.C. 441i(b)(2)(A); 11 CFR 300.32(b)(1)(ii),
300.32(c) and 300.33. ``Levin funds'' are a type of non-Federal
funds created by BCRA that may be raised and spent by State,
district, and local party committees and organizations to pay for
the allocable portion of Types 1 and 2 Federal election activity.
See 2 U.S.C. 441i(b)(2)(A) and (B); 11 CFR 300.2(i), 300.32(b).
These funds may include donations from some sources ordinarily
prohibited by Federal law (e.g., corporations, labor organizations
and Federal contractors) to the extent permitted by State law, but
are limited to $10,000 per calendar year from any source or to the
limits set by State law--whichever limit is lower. See 11 CFR
300.31.
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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.'' See Public Law 107-155, sections 214(b) and (c) (March
27, 2002); Final Rules on Coordinated and Independent Expenditures, 68
FR 421 (Jan. 3, 2003) (``Coordinated Communication Final Rules''). When
the Commission subsequently promulgated regulations implementing this
provision, it required that a communication be a ``public
communication'' as defined in 11 CFR 100.26 to qualify as either a
``coordinated communication'' or a ``party coordinated communication.''
11 CFR 109.21(c) and 109.37(a)(2); \20\ see also Coordinated
Communication Final Rules at 428-431. Thus, Internet communications
were excluded from the regulations pertaining to ``coordinated
communications'' and ``party coordinated communications.''
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\20\ An ``electioneering communication'' may also be a
coordinated communication. See 11 CFR 109.21(c)(1). However, because
``electioneering communications'' are limited to broadcast, cable,
or satellite communications, they constitute a subset of ``public
communications.'' See 2 U.S.C. 434(f)(3); 11 CFR 100.29 (defining an
``electioneering communication'' as a ``broadcast, cable, or
satellite communication'' that refers to a clearly identified
candidate for Federal office, is publicly distributed within 60 days
before a general election for the office sought by the candidate, or
within 30 days before the primary election for that office, and is
targeted to the relevant electorate).
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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. See 11 CFR 110.11(a); Final Rules on Disclaimers,
Fraudulent Solicitation, Civil Penalties, and Personal Use of Campaign
Funds, 67 FR 76962 (Dec. 13, 2002) (``Disclaimer Final Rules''). As a
result, most Internet content was excluded from the disclaimer
requirements. See id.
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.'' See 11 CFR
300.2(b)(4); Soft Money Final Rules. The second of these rules
incorporates the term ``public communication'' into the allocation
rules governing certain spending by a separate segregated fund
(``SSF'') or a nonconnected committee. See Final Rules on Political
Committee Status, Definition of Contribution, and Allocation for
Separate Segregated Funds and Nonconnected Committees, 69 FR 68056
(Nov. 23, 2004) (``Political Committee Status Final Rules''). Whenever
an SSF or nonconnected committee 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). See id.
The Shays District decision invalidated the Commission's definition
of ``public communication'' at 11 CFR 100.26, Shays District at 64-65,
based on the Commission's complete exclusion of Internet communications
from this definition. After noting that Congress used the phrase ``or
any other form of general public political advertising'' as a catch-all
in BCRA's definition of ``public communication,'' the Shays District
court concluded that ``[w]hile all Internet communications do not fall
within [the scope of ``any other form of general public political
advertising'], some clearly do.'' Shays District at 67.\21\ The Shays
District court left it to the Commission to determine ``what
constitutes `general public political advertising' in the world of the
Internet,'' and thus should be treated as a ``public communication.''
Id. at 70.
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\21\ The Shays District court analyzed the Commission's rules
under a two-step test set out by the Supreme Court in Chevron,
U.S.A., Inc. v. National Res. Def. Council, 467 U.S. 837 (1984)
(``Chevron''). The first step of the Chevron analysis examines
whether Congress has directly spoken to the precise questions at
issue. The second step considers whether the agency's resolution of
an issue not addressed in the statute is based on a permissible
construction of the statute. In reviewing the definition of ``public
communication,'' the Shays District court found that the rule's
exclusion of all Internet communications did not comport with the
plain meaning of the statutory requirement that all forms of general
public political advertising be considered forms of ``public
communication,'' and therefore did not satisfy step one of the
Chevron test. Shays District at 69-70. The Commission did not appeal
the portion of the Shays District decision regarding the definition
of a ``public communication.'' The Shays District decision also
stated that, in the alternative, the regulatory definition of
``public communication'' as applied to the ``content prong'' of the
coordinated communication regulations in 11 CFR 109.21(c) was
impermissibly narrowed by the coordination regulation, thereby
undermining the purposes of the Act and thus providing an
independent basis for invalidation under step two of the Chevron
test. See Shays District at 70-71.
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The Shays District court also found the Commission's rule defining
the term ``generic campaign activity'' to be similarly underinclusive
because it incorporated the regulatory definition of ``public
communication,'' which excluded all forms of Internet communications.
Id. at 112. Although the Shays District court found that the 2002
Notice of Proposed Rulemaking for ``generic campaign activity'' failed
to satisfy the requirements of the APA because it did not provide
adequate notice to the public that the Commission might define
``generic campaign activity'' as a ``public communication'' in the
final rules, the Shays District court otherwise approved the definition
of ``generic campaign activity'' as limited to ``public
communications.'' Id. at 112, citing the Soft Money Final Rules at
35675.
The Shays District court remanded the rules defining ``public
communication,'' ``generic campaign activity,'' and ``coordinated
communication'' to the Commission for further action consistent with
its opinion. Shays District at 131. The Commission subsequently issued
the
[[Page 18593]]
NPRM addressing the definition of ``public communication'' in each of
the remanded regulations. In the NPRM, the Commission also noted that
the term ``public communication'' is incorporated into two other
sections of its regulations, 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). The Commission also proposed new
exceptions from the definitions of ``contribution'' and ``expenditure''
to exempt volunteer and independent activity on the Internet, and
proposed an additional clarification that certain Internet activities
would qualify for the media exemption. In addition, the Commission
proposed revisions to its rules in 11 CFR 114.9 regarding employee use
of corporate and labor organization computers, software, and other
Internet equipment and services for individual Internet activities.
III. 11 CFR 100.26--Definition of ``Public Communication''
A. Proposed 11 CFR 100.26 Published in the NPRM
The Shays District decision required the Commission to identify
those Internet communications that qualify as ``general public
political advertising,'' and thus would be encompassed within the
definition of ``public communication'' in 2 U.S.C. 431(22). While
drafting a proposed rule, the Commission recognized the important
purpose of BCRA in preventing actual and apparent corruption and the
circumvention of the Act as well as the plain meaning of ``general
public political advertising,'' and the significant public policy
considerations that encourage the promotion of the Internet as a unique
forum for free or low-cost speech and open information exchange. The
Commission was also mindful that there is no record that Internet
activities present any significant danger of corruption or the
appearance of corruption, nor has the Commission seen evidence that its
2002 definition of ``public communication'' has led to circumvention of
the law or fostered corruption or the appearance thereof. Therefore,
the Commission proposed to treat paid Internet advertising on another
person's website as a ``public communication,'' but otherwise sought to
exclude all Internet communications from the definition of ``public
communication.'' \22\
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\22\ The term ``person'' is defined to include ``an individual,
partnership, committee, association, corporation, labor
organization, or any other organization or group of persons, but
such term does not include the Federal Government or any authority
of the Federal Government.'' 2 U.S.C. 431(11).
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B. Comments on the Proposed Rule
Most commenters who addressed the Shays District court's
requirement that the Commission include some forms of Internet
communications as ``general public political advertising'' expressed
general support for the rule as proposed in the NPRM.\23\ These
commenters praised the Commission's proposed separate treatment of
communications on a person's own website as distinct from
communications placed on another person's website, and nearly all
commenters agreed that paid advertisements placed on another person's
website are ``general public political advertising.'' One commenter
noted that Congress had defined ``public communication'' in 2 U.S.C.
431(22) by listing several examples of media such as television, radio,
billboards and newspapers. That commenter observed that communications
through the listed forms of media are typically placed for a fee. The
commenter concluded that it would be appropriate from a statutory
perspective for the Commission to capture within the definition of
``public communication'' only those Internet communications placed for
a fee on another person's website.
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\23\ Several commenters argued that the Commission should
preserve the status quo and continue to exclude all Internet
communications from the definition of ``public communication.'' The
Commission does not believe that such an approach would comport with
the Shays District decision.
---------------------------------------------------------------------------
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 (e.g., an
advertising trade or link exchange). Two other commenters, however,
cautioned against including any Internet communications that do not
involve the exchange of money. In light of the unique nature and
variety of Internet communications, these commenters explained, the
value of these communications would be difficult to ascertain under the
Commission's traditional tests for normal and usual charge or fair
market value.\24\
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\24\ The ``usual and normal charge for goods'' is defined as
``the price of those goods in the market from which they ordinarily
would have been purchased at the time of the [contribution or
expenditure],'' and the ``usual and normal charge for services'' is
defined as ``the hourly or piecework charge for the services at a
commercially reasonable rate prevailing at the time the services
were rendered.'' 11 CFR 100.57(d)(2) and 100.111(e)(2). See, e.g.,
Advisory Opinion 2006-01 (Pac for a Change) (discounted rate
provided by publisher to other large-quantity purchasers is the
normal and usual charge that candidate's committee is required to
pay to purchase large quantities of the candidate's book).
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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 \25\ on another
person's website for a fee; (2) a corporation or labor organization
pays for a pop-up advertisement that will appear over another person's
website; \26\ (3) an individual pays to hire a video production company
to produce a video that contains a message written by a candidate for
Federal office, purchases an e-mail list, and sends the video to all
the addresses on the purchased list; and (4) a State party committee
pays to produce a video that refers solely to a candidate for Federal
office and distributes the video only through its own website. Each of
these activities is addressed below.
---------------------------------------------------------------------------
\25\ ``Banner advertisements'' are advertisements on a Web page
that convey messages in text, animated graphics, and sound. They
traditionally appear in rectangular shape, but may take any shape.
Typically, banner advertisements are linked to the advertiser's
website, which enables a viewer to ``click through'' the
advertisement to view the advertiser's website for further
information on the product or service advertised. See http://www.netlingo.com/lookup.cfm?term=ad+banner
(last visited 3/24/06).
\26\ ``Pop-up'' advertisements usually appear in a separate
browser window from the one being viewed. The advertisements are
superimposed over the window being viewed, and require the viewer to
take some action, such as closing the window in which the pop-up
advertisement appears, to continue viewing the underlying browser
window. See http://www.netlingo.com/lookup.cfm?term=pop%2Dup%20ad
(last visited 3/24/06).
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C. Revised Rule: Internet Communications Placed on Another Person's
Website for a Fee Are ``General Public Political Advertising''
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
[[Page 18594]]
place a banner, video, or pop-up advertisement on another person's
website, the person paying makes a ``public communication.''
Accordingly, the final rule is largely the same as the proposed rule.
While no other form of Internet communication is included in the
definition of ``public communication,'' the placement of advertising on
another person's website for a fee includes all potential forms of
advertising, such as banner advertisements, streaming video, pop-up
advertisements,\27\ and directed search results.\28\ The rule thus
resolves concerns about the first two activities described in the
previous paragraph.
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\27\ Although a pop-up advertisement may not technically be part
of the underlying website or account, the Commission determines that
it is ``placed on'' a website such that it qualifies as a ``public
communication'' when a fee is paid for the pop-up.
\28\ For example, companies such as Google and Yahoo! permit an
advertiser to pay a fee to have its website appear as a ``sponsored
link,'' or otherwise featured, when specific words are typed into
the website's search engine. See http://www.google.com/intl/en/webmasters/1.html (last visited 3/24/06) and http://
searchmarketing.yahoo.com/srch/index.php (last visited 3/24/06). If
a fee is paid for such a service, then the resulting display of the
product, hyperlink, or other message constitutes a form of ``general
public political advertising.'' However, when the search results are
displayed as a result of the normal function of a search engine, and
not based on any payment for the display of a result, the search
results are not forms of ``general public political advertising.''
In addition, where a search engine returns a website hyperlink in
its normal course, and features the same hyperlink separately as the
result of a paid sponsorship arrangement, the latter is a ``public
communication'' while the former is not.
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The revised definition of ``public communication'' comports with
the Shays District decision by removing the wholesale exclusion of all
Internet communications from the definition of ``public
communication.'' At the same time, the rule is carefully tailored to
avoid infringing on the free and low-cost uses of the Internet that
enable individuals and groups to engage in political discussion and
advocacy on equal footing with corporations and labor organizations
(through their SSFs) and other political committees, without the need
to raise large amounts of funds.
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.\29\ The cost of
advertising on the Internet distinguishes it from other forms of
Internet communication, such as blogging or publishing one's own
website, which are generally performed for free or at low cost.
---------------------------------------------------------------------------
\29\ See Interactive Advertising Bureau, ``Internet Advertising
Revenues Surpass $3 Billion for Q3; Run Rate for Full Year 2005 on
Pace to Exceed $12 Billion'' (Nov. 21, 2005), available at http://www.iab.net/news/pr_2005_11_21.asp
(last visited 3/24/06).
---------------------------------------------------------------------------
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.'' See 2 U.S.C. 431(22). By definition, the word
``advertising'' connotes a communication for which a payment is
required, particularly in the context of campaign messages. See, e.g.,
The American Heritage[reg] Dictionary of the English
Language (4th ed. 2000) (``The activity of attracting public attention
to a product or business, as by paid announcements in the print,
broadcast or electronic media.''); The Random House Webster's
Unabridged Dictionary (2d ed. 2005) (``1. The act or practice of
calling public attention to one's product, service, need, etc., esp. by
paid announcements in newspapers and magazines, over radio or
television, on billboards, etc.; * * * 2. paid announcements;
advertisements.''); J.I. Richards and C. M. Curran, Oracles on
``Advertising'': Searching for a Definition, 31 Journal of Advertising
at 3 (June 2002) (An extensive survey of advertising and marketing
textbooks revealed ``certain recurring elements: (1) Paid, (2)
nonpersonal, (3) identified sponsor, (4) mass media, and (5) persuade
or influence.'')
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.\30\ Another commenter stated that the
``minimum to run a banner ad campaign on most newspaper websites and
portals is roughly $5,000.'' The Chicago Tribune, for example, charges
$5,000 per week for a ``header ad'' on http://www.chicagotribune.com, and
$20,000 per week for a ``homepage cube.'' See
http://www.tribuneinteractive.com/chicago/mediakit/rates.htm (last visited 3/
24/06). Although paying for an advertisement on Chicagotribune.com may
be less expensive than paying to place the same advertisement in the
Chicago Tribune newspaper, both still require substantial funding.
Furthermore, in both cases the advertiser is paying for access to an
established audience using a forum controlled by another person, rather
[[Page 18595]]
than using a forum that he or she controls to establish his or her own
audience.
---------------------------------------------------------------------------
\30\ See http://www.dailykos.com/special/advertising (last
visited 3/24/06).
---------------------------------------------------------------------------
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'' \31\ for ``announcement'' and
``communication.'' The Commission is not limiting the definition of
``public communication'' by requiring any particular content, such as
``express advocacy.'' There is no content requirement in the statutory
definition of ``public communication,'' and there is no other basis for
providing an additional content standard in the definition itself,
whether the communications are made through the Internet or another
medium. See 2 U.S.C. 431(22). The content of the communication is
addressed separately, such as the requirement that a State, district,
or local party committee use only Federal funds to pay for ``public
communications'' that PASO a Federal candidate. See, e.g., 2 U.S.C.
431(20); 11 CFR 100.24(b)(3) and (c)(1), 300.32(a)(1) and (2), and
300.71. Thus, limiting the definition of ``public communication'' to
only those communications containing ``express advocacy'' would be
inconsistent with the Act's recognition in section 431(20) that some
``public communications'' contain PASO messages, but not express
advocacy.
---------------------------------------------------------------------------
\31\ The term ``expressly advocating'' is defined in 11 CFR
100.22 to include phrases such as ``vote for the President, re-elect
your Congressman,'' and other slogans and words ``which in context
can have no other reasonable meaning than to urge the election or
defeat of one or more clearly identified candidate(s),'' or that,
``when taken as a whole and with limited reference to external
events such as the proximity to the election, could only be
interpreted by a reasonable person as containing advocacy of the
election or defeat of one or more clearly identified candidates.''
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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 advertising placed for a fee''
would be a form of ``general public political advertising.'' That
approach would appear to indicate that there are forms of advertising
on the Internet other than paid advertising, which is contrary to the
Commission's view and to the basis of the revised definition of
``public communication,'' which rests on the definition of
``advertising'' as a paid communication.
D. No Threshold Payment Amount for ``General Public Political
Advertising''
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.
E. Advertiser, Not Web Site Operator, Makes the ``Public
Communication''
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.'' See 11 CFR 100.24(b)(3) and (c)(1), 106.6, 109.21,
109.37, 110.11, 300.2, 300.32(a)(1) and (2), and 300.71. For example,
if a political party committee pays an Internet advertising company to
place a pop-up advertisement on a certain Web site, or to place the
pop-up advertisement in a manner that it will be triggered based on
some other action of a computer user, the political party committee--
not the advertising company or the Web site owner--would be subject to
the applicable restrictions on ``public communications.'' The
Commission also notes that, as with other media included in the
definition of ``public communication,'' the obligation to ensure that
permissible sources are used rests with the entity whose funding is
restricted by FECA, and not the Web provider.
F. Bloggers Not Addressed Separately
In the NPRM, the Commission noted that its proposed regulations
were unlikely to cover blogging activities. Nevertheless, the
Commission asked whether it should revise the proposed rule to
explicitly exclude all ``blogs'' from the definition of ``public
communication.'' Each of the bloggers who testified at the hearing, and
the majority of commenters who addressed this issue, warned against
crafting a regulation tied to specific forms of Internet communication
like blogging. One commenter noted that while at present blogs might be
readily distinguished from other Web sites based on particular software
used to generate the blog, that software is likely to change. Moreover,
this commenter noted that other forms of communications, such as peer-
to-peer
[[Page 18596]]
``podcasting,'' \32\ may soon replace blogs as the ubiquitous format
for low-cost Internet discussion and debate. Another commenter
cautioned that providing special protection for bloggers might
disadvantage others engaged in different yet analogous forms of
Internet communication.
---------------------------------------------------------------------------
\32\ ``Podcasting'' is a form of file distribution that is
currently used primarily to distribute audio files, like a radio
program, over the Internet in a format that can be received and
played through an Apple iPod or similar device. See http://www.ipodder.org/whatIsPodcasting
(last visited 3/24/06).
---------------------------------------------------------------------------
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.
G. Paid Advertising on a Web Site Is a Form of ``General Public
Political Advertising'' Even Where the Web Site Is Only Available to
the Restricted Class of a Corporation or Labor Organization, or the
Members of a Membership Organization
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,\33\ or with
the ability of a membership organization to communicate with its
members on any subject.\34\ The Commission sought comment, however, on
the appropriate treatment of advertisements placed for a fee by a
third-party advertiser on a corporation's or labor organization's Web
site that is solely available to its restricted class, or on a
membership organization's Web site available only to its members.
Specifically, the Commission asked whether such advertisements should
be excluded from the definition of ``public communication.'' NPRM at
16971. For example, if a political party committee pays to place an
advertisement on a labor organization's password-protected Web site
that is available only to that labor organization's restricted class,
should that advertisement be considered a ``public communication''?
---------------------------------------------------------------------------
\33\ The ``restricted class'' of a corporation is its
stockholders and executive or administrative personnel, and their
families, and the executive and administrative personnel of its
subsidiaries, branches, divisions, and departments and their
families. 11 CFR 114.1(j); see also 11 CFR 114.1(c). The
``restricted class'' of a labor organization is its members and
executive or administrative personnel, and their families. Id.
\34\ Under the Act and Commission regulations, corporations and
labor organizations may communicate with members of their restricted
class on ``any subject.'' See 2 U.S.C. 431(9)(B)(iii) and
441b(b)(2)(A); 11 CFR 100.134(a) and 114.3(a); see also Advisory
Opinion 1997-16 (Oregon Natural Resources Council Action).
Membership organizations may similarly communicate with their
members. Id. Corporations, labor organizations, and membership
organizations are generally prohibited, however, from making
communications to the general public in connection with a Federal
election, but they may publicly endorse Federal candidates on their
Web sites in the normal course of releasing a press release so long
as the press release is distributed in the normal manner and the
organizations make efforts to allow only de minimis exposure of
their Web sites beyond their restricted classes. See 11 CFR
114.4(c)(6) and Advisory Opinion 1997-16. Thus, corporations, labor
organizations, and membership organizations may expressly advocate
the election or defeat of a clearly identified Federal candidate on
the corporate or labor organization Web sites that are solely
available to their respective restricted class. See discussion of
revisions to 11 CFR 100.132 in section IX, below, and 11 CFR
114.5(g); see also Advisory Opinions 2000-07 (Alcatel USA, Inc.)
(corporation permitted to solicit its restricted class by providing
a password to members of the restricted class and limiting access to
its Web site solely to those password holders) and 1997-16
(membership organization prohibited from making a list of candidate
endorsements available on its Web sites unless it limited access to
the list to its members only).
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The Commission concludes that it should. There is no basis in the
Act or the Shays District decision to justify such an exception to the
definition of ``public communication.'' Moreover, three of the four
commenters addressing this issue opposed a special exclusion on the
grounds that a third-party advertiser does not have a special
relationship with members of the restricted class of a corporation or
labor organization that could justify treating Web site advertisements
to this group of individuals differently than other paid Internet
advertisements.\35\ One of these commenters, a labor organization,
explained that ``by definition, the payor of this sort of political
advertising is a stranger to the restricted class that is the audience,
and because that is so, we do not believe that under that circumstance
a blanket exemption would be appropriate.''
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\35\ The other commenter addressing the issue supported an
exception covering communications ``from corporations and labor
organizations to their restricted classes.'' These communications,
however, would not result in a ``public communication'' under the
proposed or final rules because they are not communications placed
on another person's Web site for a fee.
---------------------------------------------------------------------------
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.
H. Electronic Mail is Not a Form of ``General Public Political
Advertising''
The definition of ``public communication'' proposed in the NPRM did
not encompass any e-mail communications. None of the commenters
specifically addressed this aspect of the proposed rule, other than to
state their general agreement with the limited scope of the proposed
rule.
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.\36\ All of the
forms of ``public communication'' expressly listed by Congress normally
involve at least some charge for delivery, such as telephone charges or
postage.
---------------------------------------------------------------------------
\36\ Numerous e-mail service providers, such as Hotmail, Google,
and Yahoo!, provide free Web-based e-mail accounts that permit a
user to receive and send thousands of e-mail messages without
charge. See http://join.msn.com/?page=hotmail/plans&pgmarket (last visited 3/24/06), http://mail.google.com/mail/help/about.html (last
ail/help/about.html (last
visited 3/24/06), http://dir.yahoo.com/Business_and_Economy/Business_to_Business/Communications_and_Networking/Internet_and_World_Wide_Web/E-mail_Providers/Free_E-mail
(last visited
rs/Free_E-mail
(last visited
---------------------------------------------------------------------------
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''
[[Page 18597]]
requiring pre-authorization from the Franking Commission. See ``Meeting
to Approve New Electronic Communications Policy'' at http://www.access.gpo.gov/congress/house/house08bm108.html.
While not
controlling in this rulemaking, the e-mail exclusion is indicative of a
Congressional view that e-mail is appropriately regulated differently
than postal mail. Accordingly, the revised definition of ``public
communication'' does not encompass e-mail communications.
I. Costs of Producing Videos and Other Content for 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. See 11 CFR
300.32(a)(2).
J. No Separate Definition of ``Public Communication'' for Web Sites of
State, District, and Local Party Committees
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 public
communication that refers to a clearly identified candidate for Federal
office * * * and that promotes or supports a candidate for that office,
or attacks or opposes a candidate for that office[.]'' 2 U.S.C.
431(20)(A)(iii) (emphasis added); see also 11 CFR 100.24(b)(3). State,
district, and local political party committees and organizations and
their agents, as well as State and local officeholders and candidates
and their agents, are prohibited from using any non-Federal funds to
pay for this type of FEA. See 2 U.S.C. 441i(b) and (f); 11 CFR
100.24(b)(3) and (c)(1), 300.32(a)(1) and (2), and 300.71.
In the NPRM, the Commission explained that one reason it had
originally excluded Internet activities from the definition of ``public
communication'' in 11 CFR 100.26 was to permit State, district, and
local party committees to refer to their Federal candidates on the
committees' own Web sites or post generic campaign messages without
requiring that the year-round costs of maintaining the Web site be paid
entirely with Federal funds. NPRM at 16971. The record in this
rulemaking demonstrates that State, district, and local party
committees generally use their Web sites to promote a variety of party
policies and candidates, and that these Web sites are not predominantly
focused on Federal elections. Furthermore, given the ease of adding new
Web pages to a Web site or altering the content of existing Web pages,
both the number of Web pages within a Web site and the content of those
pages change frequently, sometimes daily or even hourly. For example, a
Federal candidate might be featured on a hyperlink from the home page
of a State party committee Web site one day, but that hyperlink may be
removed the next day as the party committee replaces it with a more
current story.
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.\37\
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\37\ No commenters or witnesses supplied comments that would
assist the Commission in determining how a State, district, or local
party committee would pay for a Web site that was captured under the
definition of ``public communication.'' The statute and regulations
do not require a local party committee to pay for all of its
``public communications'' with Federal funds, only those that PASO a
Federal candidate or otherwise constitute FEA, such as ``generic
campaign activity.'' The Commission asked in the NPRM how the
organizations would go about allocating the costs associated with
the Web site if the Commission determined that Web sites for these
organizations are ``public communications.'' Some commenters who
supported including State, district, and local party committee Web
sites in the definition of ``public communication'' suggested that a
time/space allocation would be appropriate. However, the Commission
is not convinced that the statute permits time/space allocation of
any ``public communication'' that features PASO information about a
Federal candidate. The existence of PASO would require the
organizations to pay for the ``public communications,'' i.e., the
Web site itself, entirely with Federal funds. Such a result is
inconsistent with the Act's regulation of Federal, but not non-
Federal activity. For example, such a determination could have a
ripple effect on the payment of other costs. The acquisition of the
computers or the phone line (two costs that are generally allocated
as administrative expenses) arguably could become expenses that
would be required to be paid for entirely with Federal funds because
one of the uses of the equipment would be to access or maintain a
Web site.
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[[Page 18598]]
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.\38\ One group asserted that
State, district, and local party committees should be particularly
restricted by a broad definition of ``public communication'' because
Congress used the term ``public communication'' in BCRA to restrict the
use of non-Federal funds by State, district, and local party
committees. See 2 U.S.C. 431(20)(A)(iii) and 441i(b).
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\38\ One of these commenters called for limited rules focused
exclusively on communications coordinated with corporations, while
excluding all other communications. A different commenter urged the
Commission to establish a separate rule for communications by State
party committees on the grounds that ``campaign finance laws provide
for different levels of regulation of individuals, corporations and
labor unions, and political committees (including party
committees).'' The four principal Congressional sponsors of BCRA
asserted that the definition of ``general public political
advertising'' applicable to State party committees should encompass
all Internet communications ``intended to be seen by the general
public.'' Similarly, a different group of commenters stated that a
political committee should be deemed to make a ``public
communication'' whenever it ``spends funds to communicate broadly
over the Internet--buying Web site ads, sending e-mails, maintaining
its own publicly accessible Web site-- * * * just as if it were
spending funds to communicate by broadcast or mass mailing.''
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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 (e.g., newspaper,
magazine, broadcast, mass mailing, phone bank), not the identity of the
speaker using that media. 2 U.S.C. 431(22). There is simply no
statutory support for defining ``public communication'' differently for
different persons, whether they be individuals, groups, or political
party committees. Instead, because Congress provided only one broadly
applicable definition of ``public communication,'' the Commission is
not free to conclude that a communication made through the same media
is a ``public communication'' when made by an individual, but not when
made by a political committee. Conversely, the Commission cannot
conclude that a communication is not a ``public communication'' when
made by an individual, but is a ``public communication'' if made by a
party committee through the same media.
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. See 2 U.S.C. 431(20)(A)(iii)
(including ``public communication'' in the definition of ``Federal
election activity''), 2 U.S.C. 441i(b) and (f) (prohibiting State,
district, and local party committees, and State and local candidates,
but not other political committees or individuals other than candidates
or officeholders, from paying for FEA with non-Federal funds), and 2
U.S.C. 434(e)(2) (requiring State, district, and local party committees
to report receipts and disbursements for FEA that total at least $5,000
per calendar year).
IV. 11 CFR 100.25--Definition of ``Generic Campaign Activity'' Is Not
Changed
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 public communication that promotes or opposes a
political party and does not promote or oppose a clearly identified
Federal candidate or a non-Federal candidate.'' 67 FR 49064, 49111; 11
CFR 100.25 (emphasis added). The Act requires State, district, and
local party committees that conduct ``generic campaign activity'' in
connection with an election in which a candidate for Federal office
appears on the ballot to finance such activities with Federal funds or
a mix of Federal funds and Levin funds. 2 U.S.C. 441i(b) and
431(20)(A); 11 CFR 100.24 and 300.33.
As noted above, the Shays District court remanded the Commission's
definition of ``generic campaign activity'' on two grounds: first, that
by incorporating the Commission's definition of ``public
communication'' it improperly excluded all Internet communications, and
second, for lack of notice to the public that the definition would be
limited to ``public communications'' as defined in 11 CFR 100.26. The
Commission did not appeal these holdings.
The Commission is addressing the Shays District court's first
concern by revising the definition of ``public communication'' to
include paid advertisements placed on another person's Web site, as
explained above. The Commission has addressed the Shays District
court's second concern by providing ample notice in the NPRM that it
was considering defining ``generic campaign activity'' in terms of a
``public communication.'' Therefore, the Commission is adopting a final
rule that has the same language as the previous rule and the rule
proposed in the NPRM.
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 ``all generic ``activities' '' of State, district, and local
political party committees, such as phone banks and mailings to 500 or
fewer people, and State, district, and local political party Web sites.
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,
[[Page 18599]]
nor did the commenters point to any specific real-world examples where
the definition of ``generic campaign activity'' has proven too narrow.
Second, a broad definition of ``generic campaign activity'' would
exceed the scope of the Act and pose Constitutional concerns by
capturing State, district, and local party activities designed to
support only State or local candidates, thereby improperly requiring
that State, district, and local parties finance these activities with
at least some Federal funds. For example, a State party committee that
rents a bus to transport the party's slate of candidates for the
State's executive offices during a State election occurring
contemporaneously with a Federal election, would be required to use
Federal funds or a mix of Federal and Levin funds to pay for the bus
because providing the bus would constitute support of the party and its
choice of candidates without clearly identifying any of the candidates.
The Commission does not consider these results to be required by the
Act.
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 Shays District made this same argument. The
Commission countered that under such an argument, a series of
substantially similar telephone calls made to 500 or fewer persons
could be regulated as FEA if they promote a political party, even if
they do not mention Federal candidates, whereas the same number of
substantially similar telephone calls that do promote or oppose a
specific Federal candidate would not be regulated as FEA.\39\ The Shays
District court specifically rejected the plaintiff's argument and
agreed with the Commission's reasoning, stating: ``It would indeed be
anomalous for Congress to have placed greater strictures on activities
that promote political parties than on activities that support or
attack a candidate.'' Shays District at 111. Accordingly, the Shays
District court found that the Commission's definition of ``generic
campaign activity'' was appropriate and reasonable in the context of
FEA, particularly in excluding activities such as small phone banks and
mailings. Id.
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\39\ A telephone bank that supports or opposes a Federal
candidate would be regulated as an additional form of FEA, which is
a ``public communication'' that PASOs a clearly identified Federal
candidate. 2 U.S.C. 431(20(A)(iii); 11 CFR 100.24(b)(3).
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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 NPRM. ``Generic
campaign activity'' will continue to mean a ``public communication,''
as defined in 11 CFR 100.26, that promotes or opposes a political party
and does not promote or oppose a clearly identified Federal or non-
Federal candidate.
V. 11 CFR 109.21 and 109.37--Definitions of Coordinated Communications
and Party Coordinated Communications
To be a ``coordinated communication'' or a ``party coordinated
communication,'' a communication must be a ``public communication'' as
defined in 11 CFR 100.26.\40\ See 11 CFR 109.21(c) and 11 CFR
109.37(a)(2). In Shays District, the court rejected the definition of
the term ``public communication,'' because the effect of the definition
was to exclude all Internet communications from the reach of the
coordinated communication rules. See Shays District at 70.\41\
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\40\ As noted above, an ``electioneering communication'' may
also be a coordinated communication. See 2 U.S.C. 441a(a)7)(C); 11
CFR 109.21(c)(1). However, ``electioneering communications'' are a
subset of ``public communications.''
\41\ The Court of Appeals found that the Commission had provided
inadequate justification under the APA for excluding from the
coordinated communication rules certain ``public communications''
that are publicly distributed or otherwise publicly disseminated
more than 120 days before an election. See Shays Appeal at 100. The
Commission initiated a separate rulemaking on the coordinated
communication rules to address that issue. See Coordinated
Communication Notice of Proposed Rulemaking, 70 FR 73946 (Dec. 14,
2005). The Shays Appeal decision did not address the definition of
``public communication.''
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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 Shays District court in the coordinated communication rules.
Consequently, the Commission is not amending the language of the
coordinated communication rules in this rulemaking.
In the NPRM, the Commission did not propose any changes to the
coordinated communication rule or the party coordinated communication
rule. The Commission did, however, invite comments on a number of
issues with respect to the two rules. The comments that the Commission
received generally supported the Commission's decision to reconsider
the coordinated communication rules in a separate rulemaking dedicated
to that purpose.
A. In-Kind Contributions
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.
B. Republication of Campaign Materials
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 NPRM would be appropriate. As one of the
lawyers for the Plaintiffs in the Shays litigation pointed out, the
restrictions on republication of campaign materials were not
promulgated with the Internet in mind. Because an individual need
[[Page 18600]]
not incur any cost in downloading information derived from a
candidate's website and reproducing that same information on a
different website, republication on the Internet is fundamentally
different from republication in other contexts, such as if an
individual were to pay to reprint a candidate's campaign literature.
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.'' \42\
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\42\ Senator Russ Feingold, ``Blogs Don't Need Big Government''
available at http://www.mydd.com/story/2005/3/10/112323/534 (last
visited 3/24/06).
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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. See 11
CFR 109.21(d).
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.
VI. 11 CFR 110.11--Scope of Disclaimer Requirements
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. See 11 CFR 110.11(a); see also 2 U.S.C. 441d(a).
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. See 11 CFR 110.11(a)(1). Under the 2002 rule,
when persons other than political committees make a ``public
communication'' or send substantially similar e-mail messages to more
than 500 persons, they need only include disclaimers when those
communications expressly advocate the election or defeat of a clearly
identified candidate for Federal office, solicit contributions, or
qualify as ``electioneering communications'' under 11 CFR 100.29. See
11 CFR 110.11(a)(2)-(4). Persons other than political committees are
not required to include disclaimers on their websites.
A. Disclaimer Requirements for Websites
Although the disclaimer rule was not at issue in Shays, the
Commission noted in the NPRM that because a disclaimer is required for
a certain class of ``public communication'' as defined in 11 CFR
100.26, the revision to the definition of ``public communication'' in
11 CFR 100.26 would affect the scope of the disclaimer requirement. The
Commission received several comments stating that it would be
appropriate to require disclaimers for certain ``public
communications'' that take place over the Internet, provided that the
definition of ``public communication'' was limited to advertisements
placed for a fee on another person's website as proposed in the NPRM.
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.'' \43\ See 2 U.S.C. 441d(a) and
431(22). The Commission is therefore retaining the disclaimer
requirement for any ``public communication'' that includes the content
specified in 11 CFR 110.11(a).
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\43\ See Disclaimer Final Rules, 67 FR at 76963.
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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 NPRM. Accordingly, under the revised
rules at 11 CRR 110.11, all political committee websites must continue
to include the appropriate disclaimer statements.
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. Id.
B. No Disclaimer Required for Electronic Mail Unless Sent by a
Political Committee
In the NPRM, the Commission proposed changing the disclaimer
requirement for e-mail communications. The Commission noted that it had
originally promulgated the regulatory requirement that disclaimers
appear on large quantities of e-mail communications in an effort to
focus on
[[Page 18601]]
``spam'' e-mail.\44\ NPRM at 16972. The Commission also stated that it
had become ``concerned that the current regulation emphasizes the
number of e-mail communications sent, rather than focusing on whether
an expenditure was made that would justify governmental regulation.''
Id. In addition, the Commission was concerned ``that the lack of a
definition of the term ``unsolicited'' could have the effect of
discouraging individuals from engaging in discussion and advocacy that
is core political speech protected by the First Amendment and that is
virtually cost-free.'' Id. Accordingly, while proposing to maintain the
requirement that a disclaimer appear on more than 500 substantially
similar unsolicited e-mail communications, the Commission proposed
defining the term ``unsolicited e-mail'' as e-mail ``sent to electronic
mail addresses purchased from a third party.'' Id.
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\44\ ``Spam'' is a common term for ``bulk e-mail sent out over
the Internet. These messages are often unsolicited and unwanted by
the recipient.'' Modern Dictionary for the Legal Profession, 866
(3rd ed. 2001).
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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 (ie.,
``more than 500'') for e-mail communications to trigger the disclaimer
requirement. Although one commenter supported maintaining a numerical
threshold to serve as a ``bright line rule,'' another suggested
eliminating the threshold entirely and requiring disclaimers on e-mail
sent to any address that had been purchased for the purpose of engaging
in ``political spam,'' regardless of the number involved. Still others
urged the Commission to replace the quantity threshold with a monetary
threshold; suggestions for the monetary threshold ranged from $250 to
$25,000 in expenditures for e-mail communications.
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.\45\ The Act does not expressly
or implicitly require that disclaimers appear on e-mail communications.
Congress used virtually the same language in the disclaimer provisions
and in the definition of ``public communication,'' particularly with
respect to the phrase ``or any other [type/form] of general public
political advertising,'' and the Commission has previously concluded
that the two phrases ``should be interpreted in a virtually identical
manner.'' See 2 U.S.C. 441d(a) and 431(22); Disclaimer Final Rules at
76963. As discussed above, the Commission is changing the definition of
``public communication'' to reflect the Commission's conclusion that
the only form of ``public communication'' on the Internet is
advertising that appears for a fee on another person's Web site. See
Part III, above.
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\45\ See note 22 for the definition of ``person.''
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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. See 2
U.S.C. 441b and 11 CFR 114.4. Generally, these entities are prohibited
from sending e-mail in connection with Federal elections outside their
restricted class. 2 U.S.C. 441b and 11 CFR 114.4.
C. Technical Reorganization
The Commission is making two other changes to 11 CFR 110.11(a) for
purposes of clarity. First, the Commission is deleting the first
[[Page 18602]]
sentence from paragraph (a). Second, the remaining sentence in that
paragraph is being revised to provide that disclaimers are required
only on: (1) A ``public communication,'' as defined in 11 CFR 100.26,
made by a political committee; (2) electronic mail of more than 500
substantially similar communications when sent by a political
committee; (3) a political committee website available to the general
public; and (4) a ``public communication,'' as defined in 11 CFR
100.26, made by any person that contains express advocacy, solicits a
contribution, or qualifies as an ``electioneering communication'' under
11 CFR 100.29.
D. Bloggers Paid by Candidates
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. NPRM at 16973.
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.
VII. Other Uses of the Term ``Public Communication'' in the
Commission's Regulations
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.
A. 11 CFR 106.6--Allocation of Expenses Between Federal and Non-Federal
Activities by Separate Segregated Funds and Nonconnected Political
Committees
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). See Political Committee Status
Final Rules. Because all Internet communications were exempted from the
definition of ``public communication,'' SSFs and nonconnected
committees were not required to comply with the new provisions in 11
CFR 106.6 when funding Internet communications.
In the NPRM, the Commission noted that the effect of the proposed
revisions to the definition of ``public communication'' in 11 CFR
100.26 would be to apply the allocation rules in 11 CFR 106.6(b)(1),
(b)(2), and (f) to those Internet communications covered by the revised
definition of ``public communication.'' Thus, SSFs and nonconnected
committees would be required to use Federal funds to pay for certain
``public communications'' over the Internet. The Commission invited
comment on this result.
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.
B. 11 CFR 300.2(b)(4)--Definition of an ``Agent'' of State and Local
Candidates
BCRA prohibits candidates for State and local offices, and their
agents, from using non-Federal funds to pay for any ``public
communication'' that PASOs a candidate for Federal office. See 2 U.S.C.
441i(f). Under the Commission's regulations, an ``agent'' of a
candidate for State or local office is a person who has actual
authority conferred by that candidate to ``spend funds for a public
communication,'' as defined in 11 CFR 100.26. 11 CFR 300.2(b)(4).
In the NPRM, the Commission sought comment on whether further
revisions to the definition of ``public communication'' are necessary
to address its potential effect on the definition of ``agent'' in 11
CFR 300.2(b)(4). Specifically, the Commission noted that as a result of
the proposed change to the definition of ``public communication,'' a
person would be an agent of a State or local candidate if he or she is
authorized by that candidate to pay for any Internet communication that
is included within the revised definition of ``public
[[Page 18603]]
communication.'' The Commission received no comments on this issue.
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 (i.e., a State or local
candidate) is subject to certain restrictions when making one type of
Internet communication, it follows that a corresponding change to the
scope of the agent's anticipated activities is consistent with the
original purpose of the definition of ``agent.'' Therefore, a person
will continue to be an agent of a State or local candidate if he or she
has actual authority to pay for a ``public communication'' on behalf of
the candidate, which now includes paid Internet advertising placed on
another person's website.
VIII. 11 CFR 100.94 and 100.155--Exceptions to the Definitions of
``Contribution'' and ``Expenditure'' for Internet Activity by
Individuals
The Act and Commission regulations currently exempt certain
activities by individuals from the definitions of ``contribution'' and
``expenditure.'' See 2 U.S.C. 431(8)(B)(i) and (ii); 11 CFR 100.74-
100.76 and 100.135-100.136. For example, ``the value of services
provided without compensation by any individual who volunteers on
behalf of a candidate or political committee'' is not a
``contribution'' to the candidate or political committee. 2 U.S.C.
431(8)(B)(i); 11 CFR 100.74. Similarly, ``the use of real or personal
property, including a church or community room used on a regular basis
by members of a community for noncommercial purposes, * * * voluntarily
provided by an individual to any candidate or any political committee
of a political party in rendering voluntary personal services on the
individual's residential premises or in the church or community room
for candidate-related or political party-related activities'' is not a
``contribution'' or ``expenditure.'' 2 U.S.C. 431(8)(B)(ii). See also
11 CFR 100.35, 100.36, 100.75, and 100.76.
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 NPRM, the Commission
proposed new rules to extend explicitly the existing individual
activity exceptions to the Internet to remove any potential
restrictions on the ability of individuals to use the Internet as a
generally free or low-cost means of civic engagement and political
advocacy. See NPRM at 16975-76. Specifically, the Commission proposed
two sections, 11 CFR 100.94 and 100.155, to exempt from the definitions
of ``contribution'' and ``expenditure'' the value of uncompensated
Internet activity by volunteers.
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.
A. 11 CFR 100.94(a) and 100.155(a)--Exception for Uncompensated
Internet Activity
Although the final versions of 11 CFR 100.94 and 100.155 are
structured somewhat differently from the rules proposed in the NPRM,
they have the same scope and application. Thus, under these final
rules, any individual or group of individuals who, without
compensation, uses Internet equipment and services for the purpose of
influencing a Federal election does not make a contribution or
expenditure and does not incur any reporting responsibilities as a
result of that activity.
1. Exception Not Restricted to Volunteers Known to a Campaign
In the NPRM, the Commission sought comment on whether the final
rules should apply to all individual Internet activities, regardless of
whether such activities are known to a candidate, authorized committee,
or political party committee. The Commission proposed regulations that
would apply regardless of whether the individual's Internet activities
were known to any of these groups. All commenters addressing this issue
supported the Commission's proposal. As one commenter stated, ``[f]or
the sake of clarity, the rule should apply to all `individuals,'
whether or not they are `volunteers' for a campaign that are `known' to
the campaign, or employees of a campaign.''
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. See 2 U.S.C.
431(8)(B)(i) (exempting from the definition of ``contribution'' ``the
value of services provided without compensation by an individual who
volunteers'') and 2 U.S.C. 431(8)(B)(ii) (exempting from the definition
of ``contribution'' ``the use of real or personal property * * *
voluntarily provided by an individual to any candidate or any political
committee of
[[Page 18604]]
a political party in rendering voluntary personal services'').
Moreover, one commenter pointed out that, in light of the new
opportunities to engage in political activity through the Internet,
``it would be an odd result if a campaign volunteer was exempt but
someone acting independently was not.''
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.\46\
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\46\ In Advisory Opinion 1999-17 (George W. Bush for President
Exploratory Committee), the Commission concluded that a campaign's
permission ``at some level'' was essential for the volunteer
exception to apply to an individual's Internet activity on behalf of
a presidential candidate. Advisory Opinion 1999-17 is superseded to
the extent that it indicates that the campaign or political
committee must be aware of or sanction the individual's Internet
activities in order for the individual's activity to be exempt.
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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.\47\
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\47\ See 11 CFR 100.5 (``Political committee means * * * any
committee, club, association, or other group of persons which
receives contributions aggregating in excess of $1,000 or which
makes expenditures aggregating in excess of $1,000 during a calendar
year''). As discussed below, payments to place advertisements on
another person's website, other than for a nominal fee, are not
exempt under the new exceptions for Internet activities by
individuals, and such payments could result in expenditures or
contributions.
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2. Republication
In the NPRM, the Commission noted that its proposed regulations
would protect an individual or volunteer who produces or maintains a
website or blog, or conducts other grassroots activity on the Internet.
The NPRM noted that this activity would not result in individuals or
volunteers making a contribution or expenditure and they would not
incur any reporting responsibilities. For example, if an individual
downloaded materials from a candidate or party website, such as
campaign packets, yard signs, or any other items, the downloading of
such items would not constitute republication of campaign materials.
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.
3. Personal Services Exempted
As was noted above, the Act and Commission regulations exempt
certain activities by individuals from the definitions of
``contribution'' and ``expenditure.'' See 2 U.S.C. 431(8)(B)(i) and
(ii); 11 CFR 100.74-100.76 and 100.135-100.136. For example, the Act
provides that ``the value of services provided without compensation by
any individual who volunteers on behalf of a candidate or political
committee'' is not a ``contribution'' to the candidate or political
committee. 2 U.S.C. 431(8)(B)(i). See also 11 CFR 100.74. Consistent
with these provisions, the narrative accompanying the exceptions
proposed in the NPRM made clear that the value of an individual's
uncompensated Internet services would be excepted from the definitions
of ``contribution'' and ``expenditure.'' See NPRM at 16976.
Accordingly, under new 11 CFR 100.94 and 100.155, the value of an
individual's uncompensated time and the value of any special skills
that individuals may bring to bear on their Internet activities are
exempt from the definitions of ``contribution'' and ``expenditure.''
4. Individual Services Must Be Uncompensated
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 without compensation'' from the definitions of
``contribution.'' 2 U.S.C. 431(8)(B)(i); 11 CFR 100.74 (emphasis
added). Likewise, the proposed rule limited the new exceptions to
uncompensated services.
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
[[Page 18605]]
report the payment. The expenditure by the political committee is akin
to a vendor payment, which the political committee must report to the
Commission. Similarly, if a campaign pays a blogger for technical
consulting services regarding the campaign's website, the blogger's
activities on his or her own blog would remain eligible for the
exceptions in 11 CFR 100.94 and 100.155.
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).
5. Individual Internet Activity is Exempt Regardless of Who Owns the
Computer Equipment and Where the Internet Activities Are Performed
The proposed rules in the NPRM covered three situations involving
the use of computer equipment and services by an individual for
uncompensated Internet activities: (1) The use of computer equipment
and services that the individual owns; (2) the use of computer
equipment and services available at a public facility; and (3) the use
of computer equipment and services on the individual's residential
premises.
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, but not if the individual uses a neighbor's
computer in the neighbor's home. Additionally, the proposed rules may
have been interpreted to exempt an individual's Internet activities
performed at the individual's residence using a computer supplied by
the individual's employer, but not if the Internet activities were
performed by the individual at his or her own place of work.
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.
B. 11 CFR 100.94(b) and 100.155(b)--Definition of ``Internet
Activities''
In the rule proposed in the NPRM, the Commission defined the term
``Internet activities'' to include ``e-mailing, including forwarding;
linking, including providing a link or hyperlink to a candidate's,
authorized committee's or party committee's website; distributing
banner messages; blogging; and hosting an Internet site.'' NPRM at
16978.
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 \48\ Internet site; posting banner messages; and blogging,
creating, maintaining, or hosting an Internet site; but also cover
technology that has not yet been developed. Furthermore, the new rules
cover ``podcasting'' and any other form of Internet communication that
is, or might be, used for political activity. The Commission notes that
the new definition of ``Internet activities'' contains an illustrative,
rather than an exhaustive, list of the activities that are covered.
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\48\ See note 22 for the definition of ``person.''
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C. 11 CFR 100.94(c) and 100.155(c)--Definition of ``Equipment and
Services''
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 NPRM defining
``equipment and services'' as including, but not limited to, computers,
software, Internet domain names, and Internet Service Providers (ISP).
In response to concerns that the proposed language was technology
specific, the Commission has added the phrase ``and any other
technology that is used to provide access to or use of the Internet,''
to ensure that future innovations in computer equipment and services
will be included within the final rules. New sections 100.94 and
100.155 include, but are not limited to, computers, handheld
communication devices that provide access to the Internet, software,
routers, servers, Internet access purchased from an ISP, subscription
fees, blog hosting services, bandwidth, licensed graphics, domain name
services, and e-mail services.\49\
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\49\ In Advisory Opinion 1998-22 (Leo Smith), the Commission
concluded that even if an individual acting independently incurs no
additional costs in creating a website that expressly advocates the
election or defeat of a clearly identified candidate, at least some
portion of the underlying costs of creating and maintaining that
website is an expenditure under the Act and must be reported if it
exceeds $250 in a calendar year. Later, in Advisory Opinion 1999-17
(George W. Bush for President Exploratory Committee), the Commission
concluded that in the course of developing a website for a campaign,
an individual could use ``his or her personal property at home,
i.e., a home computer'' and incur ``related costs (such as
maintaining Internet service with a provider) that are part of the
upkeep'' of the website without making a contribution or
expenditure, and without incurring any reporting obligations.
Advisory Opinion 1998-22 is superseded to the extent that it treated
as an ``expenditure'' an individual's use of computer equipment and
services for uncompensated Internet activity.
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[[Page 18606]]
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. See 2 U.S.C. 441b(a); 11 CFR 114.2. See
also discussion of 11 CFR 114.9, below.
D. 11 CFR 100.94(d) and 100.155(d)--Exceptions Applicable to
Incorporated Bloggers and Similar Corporations
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 NPRM, the Commission sought
comment on whether bloggers, acting as incorporated or unincorporated
entities, should still be eligible for the exceptions to the
definitions of ``contribution'' and ``expenditure.'' NPRM at 16975.
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. See 2
U.S.C. 431(9)(B)(i) and 11 CFR 100.73.
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.'' FEC v. Massachusetts Citizens for Life, 479
U.S. 238, 263 (1986). The Court acknowledged, however, that ``[s]ome
corporations have features more akin to voluntary political
associations than business firms, and therefore should not have to bear
burdens * * * solely because of their incorporated status.'' Id. The
Commission concludes that a corporation whose purpose and function is
to permit an individual to engage in Internet activity is more akin to
a political association than to a business firm formed to amass wealth,
and thus should not be subject to the burdens of the prohibitions on
corporate contributions and expenditures. Thus, the application of the
new exceptions in sections 100.94 and 100.155 to individuals who choose
to incorporate for these specific purposes only avoids penalizing
individuals for using the corporate form merely to limit their personal
liability.
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,'' see 11 CFR 114.12, and
recommended that the exceptions for Internet activities by individuals
only apply to bloggers who incorporate for liability purposes. However,
several other commenters asked the Commission to focus on the
activities of the resulting corporation and their relation to the
Internet activities that are the subject of the exceptions.
Specifically, one commenter recommended ``permit[ting] the
incorporation of small online-only speakers in cases where the business
of the corporation consists of the operation of a blog or other forum
for online discourse.'' Other commenters advocated ``an exempt category
of `blogger corporation' [defined] as an incorporated entity whose
principal purpose is to conduct blogging activities. Such corporations
could be treated as individuals for purposes of the campaign finance
rules applicable to Internet activity.''
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.
See, e.g., Advisory Opinion 2004-19 (DollarVote.org) (concerning a for-
profit corporation that provided commercial services to both citizens
and candidates via DollarVote.org website). The exceptions in 11 CFR
100.94(d) and 100.155(d) are not limited to blogging activities or any
other particular Internet activity. Rather, the language in new
sections 100.94(d) and 100.155(d) ensures that the Internet activities
of individuals who choose to incorporate are exempt from regulation as
``contributions'' or ``expenditures,'' regardless of whether the
individual chooses to ``blog'' or to engage in any other form of
Internet activity.
[[Page 18607]]
E. 11 CFR 100.94(e)(1) and 100.155(e)(1)--Exemption for Communications
Placed for a Nominal Fee on Another Person's Website
In the NPRM, the Commission noted that, consistent with the
proposed revision to the definition of ``public communication'' to
encompass communications placed for a fee on another person's website,
payments for a ``public communication'' on the Internet could also be a
contribution or expenditure. Therefore, the Commission proposed
excluding payments for placing communications on another person's
website from the new exceptions for individual Internet activity,
unless the communications were placed for a nominal fee, in which case
they would be excepted from the definitions of contribution and
expenditure. See NPRM at 16976.
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. See 2 U.S.C. 431(8) and (9),
441b; 11 CFR 100.52(a), 100.111(a) and 114.2(a).
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 NPRM and the existing volunteer exception that
allows for payment of a nominal fee in connection with an individual's
use of real property. See 11 CFR 100.75 (permitting payment of a
nominal fee for the use of a community room on an individual's
residential premises). It recognizes, as one commenter noted, that
``[t]he Internet has effectively put the power of advertising
communication into the hands of every citizen * * * [a]ds on blogs, for
example, cost as little as $10 per week, and ads on search engines such
as Google can cost just 10 cents per click.'' While the commenter's
remarks describe the low cost of some individual Internet
advertisements, the Commission notes the aggregate cost of a
communication, rather than the cost on a per click or per view basis,
determines whether a fee is nominal. Additionally, the exemption
recognizes that because many individuals who use the Internet cannot,
or do not, maintain their own websites, or simply wish to post to a
blog in a place where it is more likely to be seen by others, an
exemption for any nominal fee to post on another person's website is
appropriate. Therefore, individuals or groups of individuals, acting
independently or as volunteers, who post blogs or other content on host
sites, would be entitled to the exception just as if the content were
posted on their own website.
F. 11 CFR 100.94(e)(2) and (3) and 100.155(e)(2) and (3) `` No
Exemption for Payments for E-mail Lists Made at the Direction of a
Political Committee or Transferred to a Political Committee
In the NPRM, the Commission stated that it would continue to view
the purchase of mailing lists (including e-mail lists) as expenditures
or contributions when the lists are used to distribute candidate and
political committee communications for the purpose of influencing
Federal elections. See NPRM at 16976. Paying for an e-mail list is
often expensive, whereas distributing the e-mail communications is
usually free or at negligible cost. The Commission is concerned,
however, that the new exceptions for individual Internet activities
might be construed to permit individuals to pay for e-mail lists that
might then be transferred to, or used by, a political committee without
any contribution or expenditure resulting. Therefore, new 11 CFR
100.94(e)(2) and 100.155(e)(2) provide that the exemption for
individual Internet activities does not apply to any payment for the
purchase or rental of an e-mail address list when that payment is made
at the direction of a political committee. Similarly, new 11 CFR
100.94(e)(3) and 100.155(e)(3) provide that the exemption for
individual Internet activities does not apply to payments for any e-
mail address list that is subsequently transferred to a political
committee, whether that transfer is permanent or temporary (i.e.,
sharing the list of e-mail addresses for a one-time use). Under the new
rule, a contribution or expenditure would not result when an e-mail
list is purchased by an individual unless either of the conditions in
paragraphs (e)(2) or (e)(3) of 11 CFR 100.94 and 100.155 are met.
IX. 11 CFR 100.73 and 100.132--Exception for News Story, Commentary, or
Editorial by the Media
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, and other
media to cover and comment on political campaigns.'' H.R. Rep. No. 93-
1239, 93d Congress, 2d Session at 4 (1974) (emphasis added). The media
exemption is implemented in sections 100.73 and 100.132 of the
Commission's rules. See 11 CFR 100.73 (media exemption for
contributions) and 100.132 (media exemption for expenditures).
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 (i.e., whether the
entity is acting in its ``legitimate press function'').\50\
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\50\ See Reader's Digest Association v. FEC, 509 F. Supp. 1210,
1215 (S.D.N.Y. 1981); FEC v. Phillips Publishing, 517 F. Supp. 1308,
1312-1313 (D.D.C. 1981); Advisory Opinions 2005-16 (Fired Up! LLC),
2004-07 (MTV, MTV Networks, Viacom, Inc. and Viacom Internation,
Inc.), 2000-13 (Ampex Corporation and iNEXTV Corporation), 1998-17
(Daniels Cablevision), 1996-48 (National Cable Satellite
Corporation), 1996-41 (A.H. Belo Corporation), 1996-16 (Bloomberg,
L.P.) and 1982-44 (Democratic National Committee and Republic
National Committee).
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In the NPRM, the Commission proposed changing its rules to clarify
that the protections in the Act for news stories, commentary, and
editorials appearing in traditional media also apply to news stories,
commentary, and editorials appearing on the Internet. Specifically, the
Commission proposed revising 11 CFR 100.73 and 100.132 to indicate that
news stories, commentaries, and editorials that otherwise would be
entitled to the media exemption are likewise exempt when they are
distributed using the Internet.
The Commission invited comment generally on the proposed changes to
the media exemption. The Commission also asked a number of specific
[[Page 18608]]
questions, including whether the proposed changes were consistent with
or required by the Act; what the appropriate breadth of the exemptions
should be; and whether the exceptions should be limited to entities
that also have traditional, non-Internet media operations.
Thirty-seven of the comments filed in response to the NPRM
addressed the proposed changes to the media exemption. All but one of
these commenters supported extending the exemption to media activities
on the Internet,\51\ although they differed with respect to the scope
of the exemption. Some commenters, for example, suggested that the
Commission extend the media exemption to any independent entity that
publishes material, regardless of the medium used, and regardless of
whether the entity is a member of the traditional media. Others,
however, opined that not everything disseminated on the Internet
constitutes media activity within the meaning of the media exemption,
and urged the Commission to require entities operating on the Internet
to satisfy the same criteria as entities operating in traditional media
in order to qualify for the exemption. All of the commenters who
addressed the question agreed that applying the media exemption to the
Internet would be consistent with the Act, and none of the commenters
supported limiting the media exemption to entities that also have
traditional, non-Internet media operations.
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\51\ The lone dissenting commenter supported exempting all
Internet publications from regulation, but recommended that the
Commission craft a broad exception independent of the media
exemption.
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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.\52\ In
so doing, the Commission recognizes that the media exemption is
available to media entities that cover or carry news stories,
commentaries, or editorials solely on the Internet, as well as to media
entities that cover or carry news stories, commentaries, and editorials
solely in traditional media or in both traditional media and on the
Internet.
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\52\ The terms ``website'' and ``any Internet or elctronic
publication'' are meant to encompass a wide range of existing and
developing technology, such as websites, ``podcasts,'' etc. See
e.g., Testimony of Markos Moulitas Zuniga, Federal Election
Commission Public Hearing on Internet Communications at 27-28 (June
28, 2005) (``It is really truly impossible for any one person to
grasp the scope of Internet communication technologies * * * [O]ff
the top of my head, I could think of * * * blogging, e-mail, instant
messaging, message boards, Yahoo groups, Internet Relay Chat, chat
groups, podcasting, Internet radio, Flash animations, Web video,
Webcams, peer-to-peer, and social networking software. Then, there
is Grokster, * * * And the new Apple operating system has these
little applications called widgets * * * and Microsoft promises to
do the same. All of these technologies have political applications,
obviously, yet they are vastly different.'').
---------------------------------------------------------------------------
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.\53\ The Commission noted that, ``in
exempting news stories from the definition of `expenditure,' Congress
intended to assure `the unfettered right of the newspapers, TV networks
and other media to cover and comment on political campaigns.' '' \54\
The Commission found that, ``although the cable television industry was
much less developed when Congress expressed this intent, it is
reasonable to conclude that cable operators, programmers and producers,
when operating in their capacity as news producers and distributors,
would be precisely the type of `other media' appropriately included
within this exemption.''\55\
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\53\ Final Rules on Candidate Debates and News Stories, 61 FR
18049 (Apr. 24, 1996).
\54\ Id. at 18050 (quoting H.R. Rep. No. 93-1239, 93rd Cong., 2d
Sess. at 4 (1974)).
\55\ Id.
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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
[[Page 18609]]
Amendment freedoms of the press and association. Thus, the exclusion
assures the unfettered right of newspapers, TV networks, and other
media to cover and comment on political campaigns.'' Massachusetts
Citizens for Life, 479 U.S. at 250 (citing H.R. Rep. No. 93-129 at p.4
(1974)).
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. Id. See also Advisory Opinion 2003-34 (Viacom, Inc., Showtime
Networks, Inc., and TMD Productions, Inc.) (promotion by Showtime and
Viacom on their websites of a television series about a fictional
presidential election that depicted some real Federal candidates and
officeholders qualified for the media exemption).
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. See
Advisory Opinion 2005-16 (Fired Up! LLC) at 6 (noting that ``an entity
otherwise eligible for the press exception would not lose its
eligibility * * * even if the news story, commentary, or editorial
expressly advocates the election or defeat of a clearly identified
candidate for Federal office.'').
The Commission has also concluded that press entities do not
forfeit the press exemption if they solicit contributions for
candidates. See Advisory Opinion 1980-109 (James Hansen) (endorsement
of a Federal candidate and solicitations to the Federal candidate's
campaign by a publication were covered by the news story exemption);
Advisory Opinion 1982-44 (Democratic National Committee and Republican
National Committee) (concluding that solicitations for a national party
committee on cable programming were protected by the press
exemption).\56\
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\56\ There have been recent instances in which media entities
have solicited contributions for Federal candidates. See e.g., Kerry
for Prez: Why Him, Why Now and How to Put Him in the White House,
Philadelphia Daily News, June 16, 2004 (containing a lead editorial
that stated ``[Y]ou can learn more about Kerry, make a donation or
volunteer to help through his web site * * * The commonwealth--
indeed the nation--cannot afford another four years of George
Bush.''). See also Charles Krauthammer, The Delusional Dean,
Washington Post, December 5, 2003 at A31 (op-ed by a syndicated
columnist containing a solicitation for the Republican National
Committee, including instructions on where readers should send
contributions).
---------------------------------------------------------------------------
Moreover, Commissioners have repeatedly concluded that the media
exemption applies without regard to whether programming is biased or
balanced. See MUR 3624 (Walter H. Shapiro) (concluding that pro-Bush/
Quayle broadcast by Rush Limbaugh fell within the media exemption even
though the broadcast was arguably biased); Statement of Reasons by
Commissioners Wold, McDonald, Mason, Sandstrom, and Thomas in MURs
4929, 5006, 5090 and 5117 (ABC, CBS, NBC, New York Times, Los Angeles
Times and Washington Post) (``Unbalanced news reporting and commentary
are included in the activities protected by the media exemption.'');
Statement of Reasons by Commissioners Wold and Mason in MUR 4946 (CBS
News, Fox Network News, CNBC News, MSNBC News, CNN and ABC News)
(``politically biased reporting and commentary remain within the
``legitimate press function.'''). See also Statement of Reasons by
Commissioner Weintraub in MURs 5540, 5545, 5562, and 5570 (CBS, Kerry/
Edwards 2004, Inc. and Sinclair Broadcasting) at 2 (``It is not the
role of the Federal Election Commission to determine whether a news
story issued by a press entity is legitimate, responsible, or verified
* * * Whether particular broadcasts were fair, balanced, or accurate is
irrelevant given the applicability of the press exemption.'').
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, e.g., Statement of Reasons of Commissioners
Toner, Mason and Smith in MURs 5540 and 5545 (CBS, Kerry/Edwards 2004)
(``Allegations of coordination are of no import when applying the press
exemption. What a press entity says in broadcasts, news stories and
editorials is absolutely protected under the press exemption,
regardless of whether any
[[Page 18610]]
activities occurred that might otherwise constitute coordination under
Commission regulations.''); Statement of Reasons of Commissioner
Weintraub in MURs 5540, 5545, 5562, and 5570 (CBS, Kerry/Edwards 2004,
Sinclair Broadcasting) (``I believe it is important to emphasize that
the press exemption shields press entities from investigations into
alleged coordination.'')
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.\57\ The Commission concluded that the activities of Fired
Up's websites were protected by the media exemption.
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\57\ In Advisory Opinion 1982-44 (Democratic National Committee
and Republican National Committee) the Commission made clear that
``commentary'' within the meaning of the press exemption is not
limited to commentaries made by the broadcaster. The Commission
emphasized that ``commentary'' was intended to allow third persons
access to the media to discuss issues. The statute and regulations
do not define the issues permitted to be discussed or the format in
which they are to be presented under the ``commentary'' exemption.''
---------------------------------------------------------------------------
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'' \58\ and communications that are not
news stories, commentary or editorials within the meaning of the media
exemption;\59\ at the same time, it would overlook other forms of
Internet communication, such as publishing websites in other formats or
``podcasting,'' that are equally deserving of consideration under the
media exemption.\60\ Moreover, given that methods of communicating over
the Internet ``are constantly evolving and difficult to categorize
precisely,'' the wholesale exemption of any particular method of
Internet communication would be ill advised. Reno, 521 U.S. at 851.
---------------------------------------------------------------------------
\58\ McConnell, 540 U.S. at 208.
\59\ See id. (``Section 304(f)(3)(B)(I)'s effect * * * excepts
news items and commentary only.'').
\60\ See note 52 clarifying that the terms ``Website'' and ``any
Internet or electronic publication'' are meant to address a wide
range of technology that may be used by entities entitled to the
press exemption.
---------------------------------------------------------------------------
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 \61\ and, more recently, a blogger was
issued permanent press credentials as a member of the White House press
corps.\62\ Bloggers who are covering and reporting news stories in the
same way that traditional media entities have reported on newsworthy
events are entitled to the same media exemption protection that applies
to media entities such as CNN, NBC, and other traditional media.\63\
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\61\ See http://www.cnn.com/2004/TECH/internet/07/23/conventionbloggers/
(last visited 3/24/06).
\62\ See http://www.foxnews.com/story/0,2933,149689,00.html
(last visited 3/24/06).
\63\ The Commission notes that media entities such as the
Washington Post, MSNBC, Fox News, and CNN have bloggers reporting
news and commentary on their Web sites.
---------------------------------------------------------------------------
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.
X. 11 CFR 114.9--Use of Corporate or Labor Organization Facilities
In the NPRM, the Commission proposed amending its rule regarding
the provision of corporate or labor organization facilities \64\ in
connection with a Federal election to clarify that an employee's
``occasional, isolated, or incidental use'' of computer equipment and
Internet services for Federal campaign activities would not be an
expenditure or contribution by the corporation or labor organization.
Based on the comments received in response to the proposal, the
Commission is not amending 11 CFR 114.9 precisely as proposed, but
instead is reaching the same result by adding a new safe harbor
specifically allowing the use of corporate and labor organization
facilities for certain individual Internet activity in connection with
a Federal election.
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\64\ The Commission notes that under current 11 CFR 114.9 the
term ``facilities'' covers a wide variety of office equipment and
supplies, including, but not limited to, copiers, fax machines,
telephones, printers, scanners, and meeting and office space.
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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. See 11 CFR 114.2(f)(i) and 11 CFR
114.9(a) and (b). Under section 114.9, certain classes of individuals
may use corporate or labor organization facilities for Federal election
purposes, but must reimburse the corporation or labor organization to
the extent that, if at all,
[[Page 18611]]
its overhead or operating costs are increased by the individual's
``occasional, isolated, or incidental use'' of the facilities. See 11
CFR 114.9(a)(1) and (b)(1). However, if a stockholder or employee of a
corporation, or an official, member, or employee of a labor
organization, makes more than ``occasional, isolated, or incidental
use'' of corporate or labor organization facilities, and does not
reimburse the corporation or labor organization within a commercially
reasonable time at the normal and usual rental charge for the
facilities used (rather than merely for the increase in overhead or
operating costs), then the corporation or labor organization will have
made a prohibited contribution or expenditure. See 11 CFR 114.9(a)(3)
and (b)(3).\65\
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\65\ The Commission notes that an individual using corporate or
labor organization facilities to engage in personal uncompensated
Internet activities will not make a contribution or expenditure
because such Internet activities by individuals is exempt under new
11 CFR 100.94 and 100.155, as discussed above.
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Although section 114.9 provides only general guidance for
determining what constitutes ``occasional, isolated, or incidental
use,'' see 11 CFR 114.9(a)(1)(i) and (b)(1)(i), the section does
contain safe harbor provisions. The safe harbors provide that any use
of corporate or labor organization facilities, regardless of whether it
occurs during or after working hours, is considered ``occasional,
isolated, or incidental use'' if the use does not exceed one hour per
week or four hours per month. See 11 CFR 114.9(a)(2)(ii) and
(b)(2)(ii).
In the NPRM, the Commission proposed amending 11 CFR 114.9 to
clarify that the term ``facilities'' includes computers, software, and
other Internet equipment and services, but the Commission noted that an
individual's use of corporate or labor organization computers and
Internet services for campaign activity over the Internet at home, or
at locations outside of work, would remain subject to the ``occasional,
isolated, or incidental use'' restriction.
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 Sec. 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:
[I]t is now common for companies and unions to permit (and at times
encourage or even require) employees to keep and use company-or
union-owned laptops during non-working hours. Thus, for many
employees, a company- or union-owned computer is their primary or
only home computer, and the employees are permitted to make
essentially unlimited personal use of those computers--including,
for those so inclined, for political speech on the Internet.
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. See 11 CFR
114.9(a)(2)(ii) and (b)(2)(ii). The new safe harbors provide that a
corporation or labor organization may permit its employees,
shareholders, officials, and members to use its computer and Internet
facilities for volunteer individual Internet activity, as defined in 11
CFR 100.94, without a contribution resulting, provided that the
activity does not prevent an employee from completing the normal amount
of work for which the employee is paid or is expected to perform, as
specified in 11 CFR 100.54, does not increase the overhead or operating
costs of the corporation or labor organization, and the activity is in
no way coerced.
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. See 11
CFR 114.9(a)(1) and 114.9(b)(1). Rather, corporations and labor
organizations may permit use of their facilities for political
activities to the extent these facilities are available for other non-
work-related purposes.
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
[[Page 18612]]
long as the campaign activity does not, as one witness stated,
``interfere with their normal work,'' i.e. the normal amount of work
that the employee usually performs, no contribution will result.
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. See
11 CFR 114.9(a)(2)(i) and 114.9(b)(2)(i).
In the NPRM, the Commission sought comment on whether additional
rules would be necessary to ensure that corporations and labor
organizations did not ``coerce'' their employees or others into
engaging in campaign activities over the Internet. The Commission
received unanimous agreement from commenters addressing this issue that
the current rules prohibiting corporate and labor organization coercion
for contributions or fundraising activities are sufficient to prevent
such behavior regarding Internet activities. Since the new safeguards
for individual Internet activity encompass more than fundraising
activities, however, the Commission is adding new provisions at 11 CFR
114.9(a)(2)(ii)(C) and (b)(2)(ii)(C) to ensure that every individual is
free to express his or her own views, without fear of reprisal. The
Commission notes that corporations and labor organizations providing
their facilities to their employees, stockholders, officials, or
members remain subject to the prohibitions contained in 11 CFR 114.2,
which includes a prohibition on the use of coercion, including threat
of detrimental job action, any other financial reprisal, or force, to
urge any individual to make a contribution or engage in fundraising
activities on behalf of a candidate or political committee. See 11 CFR
114.2(f)(2)(iv); see also 2 U.S.C. 441b(b)(3). The Commission is also
adding new paragraph (e) to Sec. 114.9 to indicate that this section
does not alter other provisions of 11 CFR part 114 regarding
communications to and beyond a corporation's or labor organization's
restricted class.
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.
Certification of No Effect Pursuant to 5 U.S.C. 605(b)
Regulatory Flexibility Act
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.
List of Subjects
11 CFR Part 100
Elections.
11 CFR Part 110
Campaign funds, Political committees and parties.
11 CFR Part 114
Business and industry, elections, labor.
0
For the reasons set out in the preamble, the Federal Election
Commission amends Subchapter A of Chapter 1 of Title 11 of the Code of
Federal Regulations as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
0
1. The authority citation for part 100 continues to read as follows:
Authority: 2 U.S.C. 431, 434, and 438(a)(8).
0
2. Section 100.25 is republished to read as follows:
Sec. 100.25 Generic campaign activity (2 U.S.C. 431(21)).
Generic campaign activity means a public communication that
promotes or opposes a political party and does not promote or oppose a
clearly identified Federal candidate or a non-Federal candidate.
0
3. Section 100.26 is revised to read as follows:
[[Page 18613]]
Sec. 100.26 Public communication (2 U.S.C. 431(22)).
Public communication means a communication by means of any
broadcast, cable, or satellite communication, newspaper, magazine,
outdoor advertising facility, mass mailing, or telephone bank to the
general public, or any other form of general public political
advertising. The term general public political advertising shall not
include communications over the Internet, except for communications
placed for a fee on another person's Web site.
0
4. The introductory text of Sec. 100.73 is revised to read as follows:
Sec. 100.73 News story, commentary, or editorial by the media.
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:
* * * * *
0
5. Section 100.94 is added to subpart C to read as follows:
Sec. 100.94 Uncompensated Internet activity by individuals that is
not a contribution.
(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) Internet activities. For the purposes of this section, the term
``Internet activities'' includes, but is not limited to: Sending or
forwarding electronic messages; providing a hyperlink or other direct
access to another person's Web site; blogging; creating, maintaining or
hosting a Web site; paying a nominal fee for the use of another
person's Web site; and any other form of communication distributed over
the Internet.
(c) Equipment and services. For the purposes of this section, the
term ``equipment and services'' includes, but is not limited to:
Computers, software, Internet domain names, Internet Service Providers
(ISP), and any other technology that is used to provide access to or
use of the Internet.
(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.
0
6. The introductory text of Sec. 100.132 is revised to read as
follows:
Sec. 100.132 News story, commentary, or editorial by the media.
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:
* * * * *
0
7. Section 100.155 is added to read as follows:
Sec. 100.155 Uncompensated Internet activity by individuals that is
not an expenditure.
(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) Internet activities. For the purposes of this section, the term
``Internet activities'' includes, but is not limited to: Sending or
forwarding electronic messages; providing a hyperlink or other direct
access to another person's website; blogging; creating maintaining or
hosting a website; paying a nominal fee for the use of another person's
website; and any other form of communication distributed over the
Internet.
(c) Equipment and services. For the purposes of this section, the
term ``equipment and services'' includes, but is not limited to:
Computers, software, Internet domain names, Internet Service Providers
(ISP), and any other technology that is used to provide access to or
use of the Internet.
(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.
PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS
0
8. The authority citation for part 110 continues to read as follows:
Authority: 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.
0
9. Paragraph (a) of Sec. 110.11 is revised to read as follows:
Sec. 110.11 Communications; advertising; disclaimers (2 U.S.C. 441d).
(a) Scope. The following communications must include disclaimers,
as specified in this section:
(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.
* * * * *
[[Page 18614]]
PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY
0
10. The authority citation for part 114 is revised to read as follows:
Authority: 2 U.S.C. 431(8), 431(9), 432, 434, 437d(a)(8),
438(a)(8), 441b.
0
11. In Sec. 114.9, paragraphs (a) and (b) are revised and new
paragraph (e) is added to read as follows:
Sec. 114.9 Use of corporate or labor organization facilities.
(a) Use of corporate facilities for individual volunteer activity
by stockholders and employees.
(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, occasional, isolated, or incidental use
generally means--
(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) Safe harbor. For the purposes of paragraph (a)(1) of this
section, the following shall be considered occasional, isolated, or
incidental use of corporate facilities:
(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) Use of labor organization facilities for individual volunteer
activity by officials, members, and employees.
(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, occasional, isolated, or incidental use generally
means--
(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) Safe harbor. For the purposes of paragraph (b)(1) of this
section, the following shall be considered occasional, isolated, or
incidental use of labor organization facilities:
(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.
Dated: March 27, 2006.
Michael E. Toner,
Chairman, Federal Election Commission.
[FR Doc. 06-3190 Filed 4-11-06; 8:45 am]
BILLING CODE 6715-01-P