The FEC’s proposed rules, sensible and lucidly explained, are the occasion for much feeling of relief:  relief that, forced to regulate Internet politics, the agency applied, for the most part, a light touch.  As Commissioners Lenhard and Weintraub took pains to say, in a summary released late yesterday, the rules are intended "to make clear that most Internet activity is exempt from FEC regulation." 

      It might be more accurately said that Internet activity under the proposed rules is provisionally exempt.  These are still rules, built around specific terms and assumptions, and so there will be argument, in the future, about what they mean and whether the meaning should change with changed circumstances and technology.  The Internet community cannot escape this fact—that this is a rulemaking, for the first time, devoted to Internet politics, and there may be another.  Before new rules, there will come complaints, such as arguments about whether individual activity is sufficiently "uncompensated" to qualify for the exemption.  There may even be litigation over these rules, if various reform organizations so choose; or the litigation may come later, if complaints are directed toward particular activity and the complainants, meeting with no success at the FEC, challenge the agency in court. 

      And yet as the FEC considered on this occasion how to manage the competing pressures, it chose, mercifully, a largely deregulatory approach.  In the first instance, it made, as the saying goes, all the right noises.  "Through this rulemaking," the draft explanation notes, "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."  Draft at 4.  This recognition favors "clarifying and affirming that Internet activities by individuals and groups of individuals face almost no regulatory burdens under the Federal Election Campaign Act."  Id. at 5.   From this starting point, the FEC proceeds to develop the rules from two principal distinctions:  (1) between individual activity, conducted wholly individually or even collaboratively in "groups," from the activities of regulated political committees; and (2) between a speaker’s use of resources to support Internet activities that she controls, from the payment of a fee for Internet communication services supplied by others. 

      The FEC, on this basis, makes regulatory room for the "website [which] is controlled by the speaker" who is "not required to pay a fee to place a message on a website controlled by another person."  Id. at 35.  By contrast, the rule applies restrictions to "paid advertising on another person’s website," id. at 22, because "the advertiser is paying for access to an established audience using a forum controlled by another person, rather than using a forum that he or she controls to establish his or her own audience."  Id. at 23.  This is also the reason why the Commission will apply this rule without regard to the amounts spent, even if low:  the most inexpensive communications placed for a fee on the site of another will still be considered a regulated "public communication."  Id. at 25.  The Commission felt—and was—trapped by the statute that it was administering:  it did not believe that there was a legal basis for concluding otherwise.  And so, it offers this solace:

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. 

Id. at 26.

      There is no better example of how the FEC—here, doing what it can to mitigate the problem—is stuck with the logic of the statute.  This is an instance, after all, where little is at stake, because little money is being spent:  there is not much corruption to fear.  No de minimis allowance seems available, however, and so the FEC offers instead not to sue, taking into account all facts and circumstances and being "mindful of the importance of minimizing any potential regulatory burden on the use of the Internet." 

       The Commission draft must manage a similar problem, but more awkwardly, in addressing the requirement that individual "Internet activity" qualifies for exemption only if "uncompensated."  Campaign employees are not eligible for "activities for which they are compensated"; but they can retain the exemption if paid for some campaign activities but not for the exempt "Internet activities."  Id. at 61-62.  And this, about bloggers:

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. 

Id. at 62.

      Compensation would include payment to post a particular message:  the activity would no longer be exempt "uncompensated Internet activity."  Yet even the loss of the exemption "would not otherwise restrict the blogger’s activities or create an obligation on the part of the blogger to report the payment."  Id.  It is not clear how the loss of the exemption affects the legal position of the blogger: something has happened when the activity is compensated—it adversely affects the entitlement to the exemption in some way—but neither the proposed rules nor the Commission draft explain how. 

      The draft also clarifies the types of payments that would be considered "compensation" in determining entitlement to the exemption.  For example, the draft rules out as a form of compensation a campaign or other political committee’s reimbursement "for any out-of-pocket costs that the individual may incur in performing Internet activities," id., or payment to a blogger for "technical consulting services regarding the campaign’s website."  Id.  It is not certain from the discussion that a political committee has "compensated" a blogger even if it "pays the costs of setting up a website" then entrusted it to the blogger’s control and editorial discretion.  Id.   This may well be the ground for some considerable contention—complaint and litigation—in the future.

       The Commission did act decisively to extend the "media exemption" to Internet sites and publications.  Its discussion on this point expresses a regulatory policy of giving broad recognition to Internet political news and commentary:  neither the partisanship of the point of view, nor its expression in such activities as the active solicitation of political contributions, will limit the availability of the exemption.  And an endeavor of this nature might not even need to worry about the media exemption at all, if it wishes to bypass the regulatory requirement that it function as a bona fide "press entity."  A separate exemption is available to groups of individuals, incorporated or unincorporated, that engage "primarily in Internet activities…and that [do] not derive a substantial portion of [their] revenues from sources other than income from…Internet activities."  Prop. Rule §§ 100.194(d); 100.155(d). 

       So we are now going to have rules for the conduct of Internet political activity, and of the rules we might have had, these are certainly respectful of the medium, generous in approach and carefully drawn around the more sensitive points.  It is worth noting that the FEC has outperformed the CDT on this score:  it seems prepared to do better by rule than the CDT, on balance, would have had Congress accomplish by legislation.  Like any regulatory scheme, this is one stage in a longer argument, certain to continue over time; but the FEC’s contribution to that argument, necessarily limited by the statutory scheme within which it must operate, is commendably constructive.

Bob Bauer