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Electoral Insight - Technology in the electoral process

Electoral Insight – June 2000

Campaigning on the Internet: To Regulate or Not?

Campaigning on the Internet: To Regulate or Not?

The U.S. Federal Election Commission Faces the Question

Kenneth P. Doyle
Senior Editor, Money & Politics Report, Bureau of National Affairs Inc., Washington, D.C.

In January, the U.S. Federal Election Commission (FEC) received an avalanche of more than 1 200 responses to its request for comments on whether and how it should regulate political campaigning on the Internet. Most of them were from Internet users, telling the agency to keep its hands off the Web. Why did the agency ask for public input and what prompted the large response, while other FEC requests might generate only a dozen or so comments? During the last few years, the Internet has become the hottest of hot topics, not only in the high-tech world, but also in business, the media, and politics. Like regulators everywhere, the FEC is trying to catch up.

The Federal Election Campaign Act, the basic U.S. campaign finance law, was adopted in the 1970s largely as a reaction to the Watergate scandal. Not surprisingly, the model the law took for regulations was the predominant political activity of 25 years ago the amassing and spending of large sums of money to talk to voters through broadcast and print advertising, direct mail, phone banks and other, generally expensive, means of mass communication. The law known as FECA strictly limits contributions to candidates and requires those participating in a campaign to register and report campaign finances to the government.

FECA is now a quarter-century old, but the activity it regulates still dominates the American political scene in a major election year. Presidential and congressional candidates are raising ever-larger amounts of money in contests that are expected to cost, at the federal level alone, a total of $3 billion during this election cycle. Most of the money will be spent on costly mass communications, such as television, radio, and mailings. A single, 30-second television campaign spot in a large media market can cost tens of thousands of dollars. But now there is also a new communications technology never contemplated when FECA was adopted the Internet. The FEC, the agency that administers the U.S. campaign finance law, is struggling to determine if and how FECA can be applied to the Internet, or whether a whole new set of rules is needed.

The issue, according to Trevor Potter, a Washington election lawyer and former FEC chairman, is that campaign finance law presumes that efforts to influence an election must cost a lot of money. With the Internet, however, this may not necessarily be true. Someone with a home computer, a modem, and a cable or telephone line can, in theory at least, communicate with the whole on-line world at the cost of a few keystrokes. "Congress assumed in 1975 (when the current version of the FECA went into effect), that, without spending, political speech would consist merely of standing on a street corner and shouting, one of the few forms of public communication not regulated or reportable under the federal election laws," Potter wrote in a recent article published on the Web site of the Brookings Institution at http://www.brook.edu/gs/cf/cf_hp.htm. "The rise of the Internet as a medium of mass communications changes these fundamentals of communicating political speech." Creating a Web site or sending "blast e-mails" to support or oppose a federal candidate can be done by a single person at next to no cost. Whether such activities are fundamentally different from standing on a corner and shouting (also a no-cost activity) is the question now faced by the FEC.

Last November, the Commission asked for public comments about whether and how it should apply its current rules to the Internet. Although no final action is expected on the matter for some time, the eventual result of this process could be either to waive all the FEC's current campaign finance rules with regard to the Internet or to write entirely new ones. "One threshold question upon which the Commission invites comments is whether campaign activity conducted on the Internet should be subject to the ... Commission's regulations at all," the FEC said. "Are Internet campaign activities analogous to campaign activities conducted in other contexts, or do they differ to such a degree as to require different rules?"

Nearly all the replies the FEC received advocated either a hands-off or a go-slow approach. The vast majority were brief e-mail messages from ordinary Internet users. For the first time, the Commission made all the comments it received available on the FEC Web site at http://www.fec.gov. "It is my considered opinion that the Federal Election Commission should make absolutely no effort to control, restrict, monitor, tax or regulate use of the Internet in any way, shape or form," said a comment from Martin Meyer of Hamilton, Ohio. But other comments recognized that current FEC rules might be interpreted as affecting Internet activity and that new rules providing specific waivers for Internet activity probably will not be put in place quickly.

A group of correspondents, led by the non-profit Center for Democracy and Technology, called on the FEC to delay new rulings until after the current election year. At the same time, the Center said the FEC should create a "safe harbour" for Internet activities under its current rules, by making a clear statement about how it will value Internet political speech during the current political campaign. The Center, which specializes in Internet issues, said it had helped generate more than 800 comments from 200 individuals on the FEC proposal. Its comments were joined by those of a diverse group of liberal and conservative organizations, including People for the American Way, the Free Congress Foundation, and the American Civil Liberties Union.

Among the specific issues about which the FEC asked for comments were:

Put another way, that last question is: Does the Web make everyone a potential on-line publisher and therefore subject to the same constitutional protections now enjoyed by the traditional media?

A common thread in all these questions, according to Darryl Wold, the current chairman of the FEC, is how to value activity on the Internet. Wold is one of three Republicans on the six-member FEC, which also has three Democrats. In an interview, he stated that the issues are so complex that he is "not optimistic" that the Commission can write a major new Internet rule this year. This does not mean, however, that the FEC will not have to address issues raised by the new technology, which is becoming more and more widely used as a device for political fundraising and getting political messages out to voters, Wold said. The FEC is likely to continue to face a series of Internet issues either through enforcement complaints or requests for advisory opinions, he acknowledged.

In recent months, the FEC has already issued advisories to facilitate the use of the Internet to raise money for presidential primary campaigns by providing federal matching funds for on-line contributions. It has also issued opinions to non-profit and for-profit entities, allowing them to set up voter education Web sites that contain campaign-related messages. But these sites are nonpartisan and do not advocate particular candidates or points of view. Much tougher problems could be posed by Web sites set up by companies, unions, or advocacy organizations that may be designed to promote these groups' viewpoints and favoured candidates, Wold acknowledged. For example, the national labour federation, the AFL-CIO, has used its Web site at www.aflcio.org to promote Vice-President Al Gore's presidential campaign.

It is still too early to fully know how important the Internet will become to the American political process. Right now, its relative importance may be low, but that will change, many experts say. One index of Internet use by the political community is fundraising. A recent PoliticsOnline survey found that the U.S. presidential contenders raised nearly $7.5 million in campaign contributions over the Internet in 1999 led by Republican Arizona Senator John McCain, who raised more than $5 million on-line. Total Internet contributions were only five percent of the more than $140 million in contributions raised by the presidential candidates. But the future of politics on the Internet was hinted at when McCain began raising on-line contributions at the rate of nearly $1 million per week following his victory in the New Hampshire primary.

Many of the comments received by the FEC regarding its possible new ruling emphasized the potential of the Internet to inform voters and foster their participation in the political process. Respondents argued that these benefits should not be unnecessarily hampered by FEC rules. Comments submitted by America Online Inc., the world's largest provider of Internet services with over 20 million customers, discussed an ambitious program to offer its subscribers political information during the election campaign and urged the FEC "to create an understandable and unambiguous legal framework that unleashes the promise of the Internet."

Most representatives of other corporations, labour unions, and the major political parties indicated that they recognized the FEC will move slowly to write any special, new Internet rules. "Any regulations implemented by the Commission while the Internet is in its early stages of development may prematurely stunt the growth of this new medium," said comments from Thomas Josefiak and Alexander Vogel of the Republican National Committee. "The Commission should conclude ... that the best strategy to assist the growth of the Internet is to allow it to proceed with minimal government interference." Such comments were echoed by Robert Bauer, a top Democratic election law attorney with the law firm Perkins Coie. "With no specific regulations in place, the Commission should state clearly that it presumes that the use of the Internet is not regulated by the (Federal Election Campaign) Act." But Bauer also said later, "the Commission may conclude that the uncompensated provision of Web banner advertising, normally sold under commercial terms, may create a risk of corruption that warrants regulation. It might reach the same conclusion with respect to cross-linking in a commercial context. However, these circumstances may be distinguished from the mere posting of a Web page by a corporation or union." Attorney James Bopp of the Madison Center for Free Speech said flatly, "as Internet activity increases participation by individuals, and Americans desperately need more information to be self-governing, Internet activity should be left alone by the Commission." But campaign finance reform organizations Common Cause and Democracy 21 said that, while Americans should be free to use the Internet for political activity as individuals, stricter rules should apply to companies, unions, foreign nationals, and government contractors. "Actions by corporations and labour unions (whether on the Internet or in any other context) should continue to be more strictly regulated," said the campaign reform groups.

As mentioned earlier, the FEC's gathering of opinions was not the first action taken by the Commission with regard to the Internet. In 1999, the Commission approved an advisory opinion requested by the presidential campaign of Texas Governor George W. Bush, allowing the campaign wide latitude to benefit from on-line political efforts of volunteers without having to report such efforts as campaign contributions. The Commission approved the widely anticipated advisory (AO 1999-17) by a unanimous vote, relieving the Bush campaign and other campaigns of responsibility for the Internet politicking of individuals outside the campaign. The campaign also does not have to "police" the Web, to see if Bush supporters are breaking campaign finance rules, the FEC said. The FEC indicated, though, that it had not yet determined whether some Internet activities independent of the campaign might violate campaign finance rules. The Commission said it simply determined that such potential violations are not the responsibility of the campaign itself.

The FEC has also approved advisory opinions requested by Democracy Network, or Dnet, (AO 1999-25) and Election Zone LLC (AO 1999-24), allowing both non-profit and for-profit companies to operate Web sites providing non-partisan information about federal candidates. The actions signalled that the FEC appears ready to give wide latitude to on-line politicking by individual volunteers using home computers to support specific candidates, and by non-profit organizations seeking to provide a non-partisan on-line forum for election-related discussions. The FEC's most recent actions also appeared to at least partly contradict an action the Commission took in 1998, holding in an advisory opinion that a Web site created by a Connecticut man, Leo Smith, criticizing Representative Nancy Johnson (R-Conn.) could constitute a regulated, independent expenditure on behalf of Johnson's opponents. Commissioners said, however, that the Leo Smith case was complicated by the fact that Smith used a business computer, not a home computer, to create the Web site.

Even if the FEC takes a hands-off approach to the Internet, there is no guarantee that Congress will do the same, especially if there are signs that the new technology could threaten incumbent members. One possible harbinger of things to come on Capitol Hill was a provision of a new law (Public Law 106-113) passed last year, calling for protection of the Web sites of political candidates and others from "cyberpirates" people who register or traffic in Web site names that are similar to a famous name or trademark.

The cyberpiracy bill addresses a budding controversy regarding the potential misuse of candidates' names on mischievous or malicious Web sites. The legislation to prevent cyberpiracy, also known as "cybersquatting", omitted a provision in an earlier House-passed version to create a special category of Internet domain names for the president, members of Congress, and political candidates. Instead, House-Senate conferees added language more generally prohibiting the unauthorized registration of personal names as Web site names known as Internet "domain names" with the intent to profit. The new law calls for a study to be conducted by the Secretary of Commerce in consultation with the Patent and Trademark Office and the FEC. It is to provide recommendations and procedural guidelines for resolving disputes over the registration of Web site names. The study will address prevention of trafficking in Internet names and specifically must include recommendations on "protecting the public from registration of domain names that include the personal names of government officials, official candidates, and potential official candidates for federal, state, and local political office in the United States, and the use of such domain names in a manner that disrupts the electoral process and/or the public's ability to access accurate and reliable information regarding such individuals."

The move to protect candidates comes after numerous recent instances of critics and satirists buying the rights to domain names linked to various candidates in order to establish Web sites. One of the highest-profile instances occurred earlier this year with the creation of a Web site parodying Mr. Bush. Last year, the Bush campaign filed a complaint with the FEC asking for enforcement action against Zack Exley, creator of the Web site www.gwbush.com, a parody site that focused on unsubstantiated rumours that Bush used illegal drugs as a young man. The site was supported by RTMARK, which describes itself as "a group that specializes in calling attention to corporate subversion of the U.S. political and electoral process." Bush campaign attorney Benjamin Ginsberg described Exley as "a guy holding us up" for money. The campaign said Exley offered to sell the gwbush.com site to the Bush campaign for $350 000.

The potential new FEC ruling and most current commentary focus on the use of and possible restrictions on the Internet as a tool for political advocacy. There is another use for the new technology, however, that eventually may prove even more important for informing voters: on-line disclosure of the campaign finances of candidates, parties, and other political entities. Congress passed a new law last year (P.L. 106-58) with a provision requiring that major political committees file their financial disclosure reports electronically, so that they could be made available almost instantly and in easily-read form to the public on the Internet. The measure leaves it up to the FEC to write a new rule setting a financial threshold for committees that must file their disclosure reports electronically.

While the FEC may not write a rule in 2000 establishing the bounds of political advocacy on the Internet, it definitely will write a rule by the end of the year to implement the new electronic filing law, according to FEC Chairman Wold. With that rule, the Commission is expected to require on-line disclosure by most of the major U.S. political players: the two major parties, top congressional and presidential candidates, and big political action committees. Only Senate candidates are exempted from on-line disclosure by a special provision of the new law. Congress has required the FEC to have the mandatory on-line disclosure system in place by 2001. When it is in place, it will be easier and quicker than ever for American voters to track the money behind the message of each candidate and party, whether that message is conveyed through the Internet or more traditional means.

Money & Politics Report is a daily electronic news report on campaign finance, lobbying, and government ethics published by the Bureau of National Affairs Inc., Washington, D.C., which has a Web site at www.bna.com/moneyandpolitics.


Note: 

The opinions expressed are those of the authors; they do not necessarily reflect those of the Chief Electoral Officer of Canada.