By K. Daniel Glover, special to National Journal
© National Journal Group Inc.
Saturday, April 2, 2005

The Federal Election Commission's announcement that it intends to extend campaign finance restrictions to Internet communications is generating plenty of hostility online, particularly among the Web diarists known as bloggers.

After one FEC commissioner hinted that the agency might slap regulations on the Web activists sometimes credited with rallying the masses during the 2004 presidential election campaign, bloggers protested online. "This is something bloggers of all political stripes should unite against," syndicated newspaper columnist Michelle Malkin declared on her blog.

Most of the FEC commissioners insist that they have no interest in regulating the political speech of individual Web users. In draft regulations approved on March 24, the agency says that the proposed rules are designed to "have an extremely limited impact, if any, on the use of the Internet by individuals."

But many bloggers remain skeptical. In reaction to the FEC's plan to harness part of the Internet, individual online activists set off a "blog swarm."

The commission began pondering how to apply campaign finance laws to the Internet in 1999, well before the McCain-Feingold law was enacted and well before blogs were widespread and influential. During the 2000 election cycle, the activities of Web sites like the now-defunct Voter.com -- which billed itself as "a central clearinghouse of candidate and issue information, provided by the candidates and issue advocates themselves" -- raised questions about whether online campaign activities fell within the FEC's jurisdiction.

In 2001, the FEC proposed rules that addressed issues such as hyperlinks and political endorsements on the Web sites of corporations and labor unions. The planned regulations generated thousands of comments, most of them negative. Ultimately, the FEC did not issue final regulations.

The agency maintained its hands-off approach when it began to implement the 2002 campaign finance law sponsored by Sens. John McCain, R-Ariz., and Russell Feingold, D-Wis. The FEC, for example, exempted the Internet from rules governing "coordinated communications" with campaigns. But Reps. Martin Meehan, D-Mass., and Christopher Shays, R-Conn., who had sponsored the campaign legislation in the House, challenged that decision. Last fall, the U.S. District Court for the District of Columbia upheld their complaints.

The court ruled that the FEC's "exclusion of Internet communications from the coordinated communications regulation severely undermines" the law and that "to allow such expenditures to be made unregulated would permit rampant circumvention of the campaign finance laws, and foster corruption or the appearance of corruption." The court further found that the "wholesale exclusion" of the Internet from the FEC definition of "generic campaign activity" was "an impermissible construction of the act."

The FEC failed to get the majority vote necessary to appeal the ruling, so the agency has instead plunged into crafting regulations for political activity on the Internet.

Weeks before the FEC released its draft rules, Commissioner Bradley Smith, a Republican appointee and an opponent of campaign finance laws, told CNETNews.com that the court's ruling and the FEC's decision not to appeal it could force his agency to regulate the linking of blogs to candidate Web sites, and candidates' distribution of campaign materials through blogs.

Smith's comments sparked an anti-FEC outcry. A little more than a week later, bloggers calling themselves the Online Coalition drafted a letter to FEC Chairman Scott Thomas and solicited signatures. The coalition posted the letter online two hours before Thomas spoke at a conference in Washington, said coalition co-founder Michael Bassik, vice president of Internet advertising at MSHC Partners and a blogger at Personal Democracy Forum. About 600 people signed on before the coalition presented the letter to Thomas that day. And more than 2,500 signed within 48 hours.

Such lobbying had an immediate impact. Several members of the House Judiciary Committee, including ranking Democrat John Conyers of Michigan, wrote to the FEC to urge the agency to "remove any ambiguity" about the application of campaign finance law to blogs. In their March 11 letter, the lawmakers argued that the agency should not regulate links between blogs and candidate or party Web sites. The lawmakers also praised "the emergence of Web reporters who play a critical role" in the coverage of politics and said that the FEC should grant a press exemption "to those who are reporting on the Internet."

Senate Minority Leader Harry Reid of Nevada introduced a bill to exclude Internet communication from campaign finance regulations. Reid, who in one of his first acts as the Democratic leader tapped an Internet expert to reach out to bloggers, also wrote the FEC's Thomas that the agency should "avoid silencing this new and important form of political speech."

McCain and Feingold, meanwhile, issued a joint statement that blamed the uproar on "powerful monied interests," such as corporations and labor unions, that "whip up fears, however unfounded and unrealistic." Meehan compared the clamor to the long-running hoax about supposed legislation to impose a 5-cent tax on every e-mail and lamented that "this kind of misinformation is being spread by those whose job is to enforce the campaign laws."

In a separate statement, Shays said, "As new technologies emerge, we must grapple with how to apply campaign finance regulations to Web-based political expenditures, but blogs, Internet news services, and citizens acting on their own should remain free."

Feingold even made his first-ever posting on the liberal blog site MyDD.com. He defended the McCain-Feingold law, arguing that it and blogs were positive influences on the 2004 campaign that need to be sustained, in part by granting legitimate online journalists and bloggers a media exemption from the law. He also said, "Linking to 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."

Thomas also tried to allay bloggers' concerns in the speech he delivered just before receiving the letter from the Online Coalition. He said that party, corporate, and union political advertising on the Web will likely face regulation, and that some professional video clips with "easily ascertainable costs" could be deemed to be "coordinated communications" -- but he said he doubted that the FEC has "any interest in treating what individuals do on their home computers" the same way.

Thomas did question some of the paid arrangements between campaigns and bloggers in 2004. The blogging-for-hire deals that generated the most controversy involved presidential candidate Howard Dean, now chairman of the Democratic National Committee, and former Rep. John Thune, R-S.D., who was making a successful run for the Senate.

Thomas's suggestion that such deals could force bloggers to file reports with the FEC and that some bloggers might have to post campaign-related disclaimers on their sites triggered a new round of complaints from bloggers.

"I want to thank Commissioner Thomas for providing what I think is the most cogent argument for the abolition of the Federal Election Commission I've ever heard," Instapundit blogger Glenn Reynolds said in a speech after Thomas. And Mike Krempasky, a co-founder of the Online Coalition, said on the conservative blog RedState.org that he could have subtitled his transcript of Thomas's speech, "Brad Smith Was Right."

Had the FEC adopted an early draft of its proposed rules, Smith's prediction might have been on target. That draft -- dated March 10 and leaked on March 24, the day the commission unveiled its official proposal -- called for regulating political Web sites that draw more than 500 people in a 30-day period. The draft exempted only sites that are protected by passwords. Many of the political sites would have had to post campaign-related disclosures. The draft excluded only those sites that pay less than $250 per year for Internet hosting fees, Web-design software, or other costs.

But the commission instead endorsed much-less-stringent regulations that focus on paid political advertising. The March 24 draft rules question the idea of requiring bloggers to post campaign-related disclosures, noting that "the burden of complying with a disclaimer requirement, and the resources needed for the commission to monitor such a requirement, could outweigh the value of disclosure." Under the proposed rules, even blogs paid by campaigns would not have to post disclaimers, because campaigns already must disclose such payments.

The draft rules also exempt online reproduction of campaign materials. The commission cited Feingold's MyDD.com posting as a partial defense for that decision. And the media exemption would be extended to online-only publications, such as Salon.com, Slate.com, and DrudgeReport.com, three examples mentioned in the FEC's rules.

"We're pleased with the general assumptions," said John Morris, director of the Internet Standards, Technology, and Policy project at the Center for Democracy and Technology. Although he said his center is concerned that the proposed rules could apply to bloggers who incorporate, he added, "It's a lot better than the March 10 draft."

Fred Wertheimer of Democracy 21, a campaign finance reform advocacy group, said he is pleased the "nightmare scenarios" that Smith floated are no longer under consideration. But he added, "We are glad that the FEC ... has made clear that paid advertising by third parties coordinating with candidates is covered" by the law, regardless of the medium.

The release of the FEC proposal eased the concerns of some bloggers. A March 25 posting at Daily Kos, for instance, said, "Nothing described sounds too onerous." But others still want to ensure that incorporated bloggers are not automatically regulated and that a great many bloggers qualify for the media exemption. The Online Coalition plans to send comments to the FEC soon. Public hearings are tentatively set for June 28 and 29.

Until then, bloggers are basking in their apparent success at changing the course of the debate. Noting the differences between the March 10 and March 24 drafts, Bassik said, "It just goes to show that we as a community helped to wake up the FEC."

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