18589

Rules and Regulations Federal Register Vol. 71, No. 70

Wednesday, April 12, 2006

This section of the FEDERAL REGISTER FOR FURTHER INFORMATION CONTACT: Mr. campaign activity’’ without revision; (3) contains regulatory documents having general Brad C. Deutsch, Assistant General revise the disclaimer requirements; (4) applicability and legal effect, most of which Counsel, Mr. Richard T. Ewell, Ms. Amy add an exception for uncompensated are keyed to and codified in the Code of L. Rothstein, or Ms. Esa L. Sferra, individual Internet activities; (5) revise Federal Regulations, which is published under Attorneys, 999 E Street, NW., the ‘‘media exemption;’’ and (6) add a 50 titles pursuant to 44 U.S.C. 1510. Washington, DC 20463, (202) 694–1650 new provision regarding the use of The Code of Federal Regulations is sold by or (800) 424–9530. corporate and labor organization the Superintendent of Documents. Prices of SUPPLEMENTARY INFORMATION: computers and other equipment for new books are listed in the first FEDERAL Internet activities by certain REGISTER issue of each week. Introduction individuals. The Commission is promulgating The Commission is aware of the these final rules to provide guidance heightened importance and public FEDERAL ELECTION COMMISSION with respect to the use of the Internet in awareness of any change to its rules that connection with Federal elections. The could affect political activity and speech 11 CFR Parts 100, 110, and 114 Commission commenced this on the Internet. The Commission notes [Notice 2006—8] rulemaking following a decision of the that the change to the definition of United States District Court for the ‘‘public communication’’ in this Internet Communications District of Columbia in Shays v. Federal rulemaking is a change to a definition Election Commission, 337 F. Supp. 2d that has a narrow impact on the law.2 AGENCY: Federal Election Commission. 28 (D.D.C. 2004) (‘‘Shays District’’), This term defines the scope of covered ACTION: Final Rules and Transmittal to aff’d, 414 F.3d 76 (D.C. Cir. 2005) activity for a limited number of groups Congress. (‘‘Shays Appeal’’), reh’g en banc denied who are either already subject to SUMMARY: The Federal Election (Oct. 21, 2005), which required the Commission regulation, or who are Commission is amending its rules to Commission to remove the former coordinating with candidates or include paid advertisements on the wholesale exclusion of Internet activity political parties who are themselves Internet in the definition of ‘‘public from its definitions of two terms: currently subject to regulation. Congress communication.’’ These final rules ‘‘public communication’’ and ‘‘generic did not use the term ‘‘public implement the recent decision of the campaign activity.’’ In examining issues communication’’ to regulate the vast U.S. District Court for the District of relating to Internet communications, the majority of the American public’s Columbia in Shays v. Federal Election Commission has also decided to address activity on the Internet or elsewhere. Commission, which held that the several of its other rules to remove Everyday activity by individuals, even previous definition of ‘‘public potential restrictions on the ability of when political in nature, will not be communication’’ impermissibly individuals and others to use the affected by the changes made in this excluded all Internet communications. Internet as a low-cost means of civic rulemaking. The revised definition of ‘‘public engagement and political advocacy. Through this rulemaking, the communication’’ includes paid Internet These final rules follow the Commission recognizes the Internet as a advertising placed on another person’s publication of a Notice of Proposed unique and evolving mode of mass website, but does not encompass any Rulemaking (‘‘NPRM’’) on Internet communication and political speech other form of Internet communication. Communications, in which the that is distinct from other media in a The Commission is also re-promulgating Commission sought comments on manner that warrants a restrained without change its definition of ‘‘generic several proposed revisions to its rules. regulatory approach. The Internet’s campaign activity’’ and amending the See 70 FR 16967 (April 4, 2005). The accessibility, low cost, and interactive scope of its disclaimer regulations, both Commission received more than 800 features make it a popular choice for of which incorporate the revised comments in response to the NPRM, the sending and receiving information. definition of ‘‘public communication.’’ vast majority of which urged limited, if Unlike other forms of mass Additionally, the Commission is adding any, regulation of Internet activities. communication, the Internet has new exceptions to the definitions of Additionally, the Commission received minimal barriers to entry, including its ‘‘contribution’’ and ‘‘expenditure’’ to a letter from the Internal Revenue low cost and widespread accessibility. exclude Internet activities and Service indicating that ‘‘the proposed Whereas the general public can communications that qualify as rules do not pose a conflict with the communicate through television or individual activity or that qualify for the Internal Revenue Code or the radio broadcasts and most other forms ‘‘media exemption.’’ These final rules regulations thereunder.’’ of mass communication only by paying are intended to ensure that political After reviewing the written comments 2 committees properly finance and and testimony provided at a hearing on The change affects only the following regulatory June 28 and 29, 2005,1 the Commission provisions: the restrictions on funding of Federal disclose their Internet communications, election activity by political party committees and without impeding individual citizens has decided to take the following six State and local candidates (2 U.S.C. 431(20)); the from using the Internet to speak freely actions: (1) Revise its definition of allocation of costs of certain communications by ‘‘public communication;’’ (2) re- some political committees under 11 CFR 106.6(b); regarding candidates and elections. the determination that certain communications Further information is provided in the promulgate the definition of ‘‘generic must be treated as contributions if coordinated with Supplementary Information that a Federal candidate or political party committee follows. 1 The comments and a transcript of the hearing under 11 CFR 109.21 and 109.37; and the are available at http://www.fec.gov/law/ requirement to include disclaimer statements on DATES: Effective Date: May 12, 2006. law_rulemakings.shtml#Internet05. certain communications pursuant to 11 CFR 110.11.

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substantial advertising fees, the vast radio, newspapers, magazines, or even afford to provide only a very limited majority of the general public who billboards, ‘‘the Internet can hardly be amount of air time to viewers for similar choose to communicate through the considered a ‘scarce’ expressive purposes, some bloggers can and often Internet can afford to do so. commodity. It provides relatively do publish every message submitted by When paid advertising on another unlimited, low-cost capacity for readers. In fact, one commenter drew person’s website does occur on the communication of all kinds.’’ Reno v. upon his own experience as a blogger in Internet, the expense of that advertising ACLU, 521 U.S. 844, 870 (1997). In noting that much of the emerging sets it apart from other uses of the response to the NPRM, one commenter Internet culture depends on Internet, although even the cost of noted that a ‘‘computer and an Internet collaboration for the construction of a advertising on another entity’s website connection can turn anyone into a blog or website, the generation of will often be below the cost of publisher who can speak to a mass content (according to the blogger’s advertising in some other media. audience.’’ For example, an individual testimony, most blogs do not have paid These final rules therefore implement with access to a computer and the staff to perform such functions), and the 5 the regulatory requirements mandated Internet can create a free blog at sites sharing of information and online by the Shays District decision by such as www.blogger.com, resources. The commenter stated that focusing exclusively on Internet www.blogeasy.com, spaces.msn.com, or his website has more than 50,000 advertising that is placed for a fee on www.typepad.com. Additionally, registered users contributing to its another person’s website. In addition, because an Internet communication is content, and he estimated that he writes these rules add new exceptions to the not limited in duration and is not only about 2,000 of the 200,000 words definitions of ‘‘contribution’’ and subject to the same time and space of content published on his website ‘‘expenditure’’ to protect individual and limitations as television and radio each day. media activity on the Internet.3 programming, the Internet provides a As a whole, these final rules make means to communicate with a large and A number of commenters also noted plain that the vast majority of Internet geographically widespread audience, that the Internet differs from traditional communications are, and will remain, often at very little cost.6 Now that many forms of mass communication because free from campaign finance regulation. public spaces such as libraries, schools, individuals must generally be proactive To the greatest extent permitted by and coffee shops provide Internet access in order to access information on a Congress and the Shays District without charge, individuals can create website, whereas individuals receive decision, the Commission is clarifying their own political commentary and information from television or radio the and affirming that Internet activities by actively engage in political debate, instant the device is turned on, or individuals and groups of individuals rather than just read the views of others. passively view a billboard while driving face almost no regulatory burdens under In the words of one commenter, the or walking down a street. These the Federal Election Campaign Act. The Internet’s ‘‘near infinite capacity, comments echo the Supreme Court’s need to safeguard Constitutionally diversity, and low cost of publication observation that communications over protected political speech allows no and access’’ has ‘‘democratized the mass the Internet are not as ‘‘invasive’’ as other approach. distribution of information, especially communications made through in the political context.’’ The result is traditional media. See Reno, 521 U.S. at Transmission of Final Rules to the most accessible marketplace of ideas 869. For example, a broadcast television Congress in history. viewer or radio listener who turns on Under the Administrative Procedure It is common for businesses, groups, his television or radio set is Act (‘‘APA’’), 5 U.S.C. 553(d), and the and even individuals, to make their own automatically subjected to the limited, Congressional Review of Agency media—their website space—available available programming. In contrast, a Rulemaking Act, 5 U.S.C. 801(a)(1), to readers without charge. Whereas a website’s information is seen only by agencies must submit final rules to the newspaper can afford to devote only a those who actively take the steps Speaker of the House of Representatives limited amount of its print to others necessary to find, visit, and view the and the President of the Senate and without charge, in the form of letters to website. publish them in the Federal Register at the editor, and a television station can During 2005, an estimated 204 million least 30 calendar days before they take people in the United States used the effect. The final rules that follow were L. Rev. 1482, 1494 (May 2004) (discussing broadcast Internet.7 In the first half of 2005, an transmitted to Congress on March 29, media and the Internet as ‘‘imperfect substitutes’’); estimated 67 percent of the adult 2006. see also Ryan Z. Watts, Independent Expenditures on the Internet: Federal Election Law and Political American population used the Internet.8 Explanation and Justification Speech on the World Wide Web, 8 CommLaw At the end of 2004, 87 percent of Conspectus 149, 160 (Winter 2000) (discussing I. Unique Characteristics and Uses of Reno v. ACLU, 521 U.S. 844 (1997) and the American teens (ages 12–17, the Internet Internet’s differences from traditional media). representing the next generation of 5 The word ‘‘blog’’ derives from the term ‘‘Web voters) were using the Internet,9 and on The Internet has a number of unique log’’ and is defined as ‘‘an online diary; a personal average, 70 million American adults characteristics that distinguish it from chronological log of thoughts published on a Web page.’’ Webster’s New Millennium Dictionary of traditional forms of mass 7 See Internet World Stats available at http:// 4 English, available at http://www.dictionary.com communication. Unlike television, (last visited 3/24/06). People who maintain blogs www.Internetworldstats.com/stats2.htm (last visited are known as ‘‘bloggers.’’ 3/24/06). 3 The terms ‘‘contribution’’ and ‘‘expenditure’’ 6 See Edward L. Carter, Outlaw Speech on the 8 See Pew Internet & American Life Project, How include gifts, subscriptions, purchases, payments, Internet: Examining the Link Between Unique Women and Men use the Internet, p. I, (2005) distributions, loans, advances or deposits of money, Characteristics of Online Media and Criminal Libel available at http://www.pewInternet.org/pdfs/ or anything of value made by any person for the Prosecutions, 21 Santa Clara Computer & High PIP_Women_and_Men_online.pdf (last visited 3/24/ purpose of influencing any election for Federal Tech. L.J. 289, 316–17 (January 2005) (‘‘Internet is 06). office. See 2 U.S.C. 431(8)(A)(i) and 431(9)(A); see unlike traditional print or broadcast media in that 9 See Pew Internet & American Life Project, Teens also 11 CFR Part 100, Subparts B & D. messages can have a long shelf life—an Internet and Technology, p. I (2005) available at http:// 4 See Enrique Armijo, Public Airwaves, Private message can circulate via e-mail or remain posted www.pewInternet.org/pdfs/ Mergers: Analyzing the FCC’s Faulty Justification somewhere even long after the message’s creator PIP_Teens_Tech_July2005web.pdf (last visited 3/ for the 2003 Media Ownership Rule Change, N.C. has tried to retract it.’’). 24/06).

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logged onto the Internet on a daily own websites; submitting comments communication.’’ First, Congress basis.10 regarding Federal candidates and required State, district, and local A growing segment of the American political parties on websites owned by political party committees and population uses the Internet as a other individuals; creating organizations, as well as State and local supplement to, or as a replacement for, advertisements, videos, and other candidates, to use only Federal funds 17 more traditional sources of information audiovisual tools for distribution on the to pay for any ‘‘public communication’’ and entertainment, such as newspapers, Internet; fundraising; promoting or that promotes, supports, attacks or magazines, television, and radio. By republishing candidate-authored opposes (‘‘PASOs’’) a clearly identified mid-2004, 92 million Americans materials; participating in online candidate for Federal office. See 2 reported obtaining news from the ‘‘chats’’ about campaigns; providing U.S.C. 431(20)(A)(iii) and 441i(b) and Internet.11 hyperlinks from their own websites to (f); see also 11 CFR 100.24(b)(3) and The 2004 election cycle also marked campaign websites and other websites; (c)(1), 300.32(a)(1) and (2), and 300.71.18 a dramatic shift in the scope and and using e-mail to organize grassroots Congress defined a ‘‘public manner in which Americans used political activities. communication’’ as ‘‘a communication websites, blogs, listservs,12 and other A number of commenters suggested by means of any broadcast, cable, or Internet communications to obtain that the potential for a free exchange of satellite communication, newspaper, information on a wide range of information and opinions through the magazine, outdoor advertising facility, campaign issues and candidates.13 The Internet promotes access to information mass mailing, or telephone bank to the number of Americans using the Internet about candidates, ballot measures, and general public, or any other form of as a source of campaign news more than legislation. More than half of the general public political advertising.’’ 2 doubled between 2000 and 2004, from hundreds of commenters expressed U.S.C. 431(22). When the Commission 30 million to 63 million.14 An estimated concern that the same unique promulgated regulations to implement 11 million people relied on politically characteristics of the Internet that make these BCRA provisions, it explicitly oriented blogs as a primary source of it so widely accessible to individuals excluded all Internet communications information during the 2004 and small groups also makes it more from its definition of ‘‘public presidential campaign,15 and 18 percent likely that individuals and small groups communication’’ and, therefore, none of of all Americans cited the Internet as whose web activities generally are not the Commission’s rules governing the their leading source of news about the regulated by FECA might engage in funding of ‘‘public communications’’ 2004 presidential election.16 activities that unintentionally trigger applied to Internet communications. See Individuals not only sought Federal regulation. Whereas the 11 CFR 100.26; Final Rules on information about campaigns on the corporations and other organizations Prohibited and Excessive Contributions; Internet, but also took advantage of the capable of paying for advertising in Non-Federal Funds or Soft Money, 67 low cost of Internet communication as traditional forms of mass FR 49064 (July 29, 2002) (‘‘Soft Money they took active roles in supporting communication are also likely to Final Rules’’). policies and candidates. According to a possess the financial resources to obtain Second, Congress restricted the funds number of commenters, common legal counsel and monitor Commission that State, district, and local political Internet activities have included: regulations, individuals and small party committees may use for certain Posting commentary regarding Federal groups generally do not have such types of ‘‘Federal election activity’’ candidates and political parties on their resources. Nor do they have the (‘‘FEA’’), including ‘‘generic campaign resources, as one commenter cautioned, activity.’’ 2 U.S.C. 431(20)(A)(ii) and 10 See Pew Internet & American Life Project, to respond to politically motivated 441i(b); 11 CFR 100.24(2)(ii) and Trends 2005, Chapter 4, Internet: The complaints in the enforcement context. 300.33(a)(2).19 Congress defined Mainstreaming of Online Life, p. 58 (2005) available at http://www.pewInternet.org/pdfs/ Several commenters warned that Internet_Status_2005.pdf (last visited 3/24/06). individuals might simply cease their 17 ‘‘Federal funds’’ are funds subject to the 11 See Pew Internet & American Life Project and Internet activities rather than attempt to limitations, prohibitions, and reporting the University of Michigan School of Information, requirements of the Act. See 11 CFR 300.2(g). ‘‘Non- comply with regulations they found Federal funds’’ are funds not subject to the The Internet and the Democratic Debate, p. 2 overly burdensome and costly. Thus, (October 27, 2004) available at http:// limitations and prohibitions of the Act. See 11 CFR www.pewInternet.org/pdfs/ some commenters asserted, it is 300.2(k). PIP_Political_Info_Report.pdf (last visited 3/24/06). essential that the Commission narrow 18 There are four types of ‘‘Federal election 12 A ‘‘listserv’’ is a software program that activity’’: Type 1—Voter registration activity during the scope and impact of any regulation the period that begins on the date that is 120 days automatically sends electronic mail messages to of Internet activity and establish bright- multiple e-mail addresses on an electronic mail list. before a regularly scheduled Federal election is See, e.g., http://www.lsoft.com/products/listserv.asp line regulations to delineate any held and ends on the date of the election; Type 2— (last visited 3/24/06). The term ‘‘listserv’’ is restricted activity in order to avoid Voter identification, get-out-the-vote activity, or ‘‘generic campaign activity’’ conducted in commonly used, however, to denote the electronic chilling political participation and connection with an election in which a candidate mail list itself or the automated forwarding to all speech on the Internet. for Federal office appears on the ballot; Type 3— addresses on the mailing list of an e-mail sent only A ‘‘public communication’’ that promotes, to the listserv’s e-mail address. II. Congressional Action, Commission supports, attacks or opposes a clearly identified 13 See Pew Internet & American Life Project, The Action, and the Courts candidate for Federal office; and Type 4—Services Internet and Campaign 2004, available at http:// _ _ provided during any month by an employee of a www.pewInternet.org/pdfs/PIP 2004 Campaign.pdf The Bipartisan Campaign Reform Act State, district, or local committee of a political party (last visited 3/24/06). of 2002, Public Law 107–155, 116 Stat. who spends more than 25 percent of that 14 See note 9, above, The Internet and Democratic 81 (2002) (‘‘BCRA’’), amended the individual’s compensated time during that month Debate, p. 2. During the same time period, the Federal Election Campaign Act of 1971, on activities in connection with a Federal election. number of people reporting television as their See 2 U.S.C. 431(20) and 11 CFR 100.24. primary source of campaign information declined. as amended (the ‘‘Act’’), 2 U.S.C. 431 et 19 State, district, and local party committees and Id. seq., in various respects. The organizations may use an allocated mix of Federal 15 See Jessica Mintz, When Bloggers Make News— Commission implemented these funds and ‘‘Levin funds’’ to pay for ‘‘generic As Their Count Increases, Web Diarists Are Asking: changes in the law through a series of campaign activity’’ conducted in connection with Just What Are the Rules? Wall St. J., Jan. 21, 2005 an election in which a candidate for Federal office at B1. rulemakings during 2002. appears on the ballot (regardless of whether a 16 See note 10, above, The Mainstreaming of A number of these changes hinged on candidate for State or local office also appears on Online Life, p. 2. the definition of ‘‘public Continued

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‘‘generic campaign activity’’ as 441d by requiring a disclaimer form of general public political ‘‘campaign activity that promotes a whenever a disbursement for ‘‘general advertising’’ as a catch-all in BCRA’s political party and does not promote a public political advertising’’ is either definition of ‘‘public communication,’’ [Federal] candidate or non-Federal made by any political committee, or the Shays District court concluded that candidate.’’ 2 U.S.C. 431(21). The expressly advocates the election or ‘‘[w]hile all Internet communications do Commission incorporated the term defeat of a clearly identified candidate, not fall within [the scope of ‘‘any other ‘‘public communication,’’ along with its or solicits any contribution. The form of general public political exclusion of Internet communications, Commission relied primarily on the advertising’], some clearly do.’’ Shays into the definition of ‘‘generic campaign definition of ‘‘public communication’’ District at 67.21 The Shays District court activity’’ in its rules. See 11 CFR 100.25; in 11 CFR 100.26 when it implemented left it to the Commission to determine Soft Money Final Rules. the new disclaimer requirements, ‘‘what constitutes ‘general public Third, Congress expressly repealed although it also required disclaimers for political advertising’ in the world of the the Commission’s then-existing rules on political committee websites available Internet,’’ and thus should be treated as ‘‘coordinated general public political to the general public and certain a ‘‘public communication.’’ Id. at 70. communication’’ at former 11 CFR unsolicited electronic mailings of more The Shays District court also found 100.23 and instructed the Commission than 500 substantially similar the Commission’s rule defining the term to promulgate new regulations on communications. See 11 CFR 110.11(a); ‘‘generic campaign activity’’ to be ‘‘coordinated communications paid for Final Rules on Disclaimers, Fraudulent similarly underinclusive because it by persons other than candidates, Solicitation, Civil Penalties, and incorporated the regulatory definition of authorized committees of candidates, Personal Use of Campaign Funds, 67 FR ‘‘public communication,’’ which and party committees.’’ See Public Law 76962 (Dec. 13, 2002) (‘‘Disclaimer Final excluded all forms of Internet 107–155, sections 214(b) and (c) (March Rules’’). As a result, most Internet communications. Id. at 112. Although 27, 2002); Final Rules on Coordinated content was excluded from the the Shays District court found that the and Independent Expenditures, 68 FR disclaimer requirements. See id. 2002 Notice of Proposed Rulemaking for 421 (Jan. 3, 2003) (‘‘Coordinated The Commission also incorporated ‘‘generic campaign activity’’ failed to Communication Final Rules’’). When the term ‘‘public communication’’ into satisfy the requirements of the APA the Commission subsequently two other regulations at 11 CFR because it did not provide adequate promulgated regulations implementing 300.2(b)(4) and 11 CFR 106.6, and notice to the public that the this provision, it required that a thereby excluded Internet content from Commission might define ‘‘generic communication be a ‘‘public those requirements as well. The first of campaign activity’’ as a ‘‘public communication’’ as defined in 11 CFR these regulations defines an ‘‘agent’’ of communication’’ in the final rules, the 100.26 to qualify as either a a candidate for State or local office as a Shays District court otherwise approved ‘‘coordinated communication’’ or a person who has actual authority by that the definition of ‘‘generic campaign ‘‘party coordinated communication.’’ 11 candidate to ‘‘spend funds for a public activity’’ as limited to ‘‘public CFR 109.21(c) and 109.37(a)(2); 20 see communication.’’ See 11 CFR communications.’’ Id. at 112, citing the also Coordinated Communication Final 300.2(b)(4); Soft Money Final Rules. The Soft Money Final Rules at 35675. Rules at 428–431. Thus, Internet second of these rules incorporates the The Shays District court remanded communications were excluded from term ‘‘public communication’’ into the the rules defining ‘‘public the regulations pertaining to allocation rules governing certain communication,’’ ‘‘generic campaign ‘‘coordinated communications’’ and spending by a separate segregated fund activity,’’ and ‘‘coordinated ‘‘party coordinated communications.’’ (‘‘SSF’’) or a nonconnected committee. communication’’ to the Commission for Fourth, Congress revised the See Final Rules on Political Committee further action consistent with its ‘‘disclaimer’’ requirements in 2 U.S.C. Status, Definition of Contribution, and opinion. Shays District at 131. The Allocation for Separate Segregated Commission subsequently issued the the ballot), or the party committee or organization Funds and Nonconnected Committees, must pay for the communication entirely with 69 FR 68056 (Nov. 23, 2004) (‘‘Political 21 The Shays District court analyzed the Federal funds. See 2 U.S.C. 441i(b)(2)(A); 11 CFR Committee Status Final Rules’’). Commission’s rules under a two-step test set out by 300.32(b)(1)(ii), 300.32(c) and 300.33. ‘‘Levin the Supreme Court in Chevron, U.S.A., Inc. v. funds’’ are a type of non-Federal funds created by Whenever an SSF or nonconnected National Res. Def. Council, 467 U.S. 837 (1984) BCRA that may be raised and spent by State, committee pays for a ‘‘public (‘‘Chevron’’). The first step of the Chevron analysis district, and local party committees and communication’’ that (1) refers to a examines whether Congress has directly spoken to organizations to pay for the allocable portion of the precise questions at issue. The second step Types 1 and 2 Federal election activity. See 2 U.S.C. political party, but does not refer to any considers whether the agency’s resolution of an 441i(b)(2)(A) and (B); 11 CFR 300.2(i), 300.32(b). clearly identified Federal or non-Federal issue not addressed in the statute is based on a These funds may include donations from some candidate, or (2) refers to one or more permissible construction of the statute. In reviewing sources ordinarily prohibited by Federal law (e.g., clearly identified Federal candidates, the definition of ‘‘public communication,’’ the corporations, labor organizations and Federal Shays District court found that the rule’s exclusion contractors) to the extent permitted by State law, the SSF or nonconnected committee of all Internet communications did not comport but are limited to $10,000 per calendar year from must pay for the communication with the plain meaning of the statutory requirement any source or to the limits set by State law— entirely with Federal funds or by that all forms of general public political advertising whichever limit is lower. See 11 CFR 300.31. allocating such expenses between its be considered forms of ‘‘public communication,’’ 20 An ‘‘electioneering communication’’ may also and therefore did not satisfy step one of the be a coordinated communication. See 11 CFR Federal and non-Federal accounts in Chevron test. Shays District at 69–70. The 109.21(c)(1). However, because ‘‘electioneering accordance with 11 CFR 106.6(b) and Commission did not appeal the portion of the Shays communications’’ are limited to broadcast, cable, or (f). See id. District decision regarding the definition of a satellite communications, they constitute a subset The Shays District decision ‘‘public communication.’’ The Shays District of ‘‘public communications.’’ See 2 U.S.C. 434(f)(3); invalidated the Commission’s definition decision also stated that, in the alternative, the 11 CFR 100.29 (defining an ‘‘electioneering regulatory definition of ‘‘public communication’’ as communication’’ as a ‘‘broadcast, cable, or satellite of ‘‘public communication’’ at 11 CFR applied to the ‘‘content prong’’ of the coordinated communication’’ that refers to a clearly identified 100.26, Shays District at 64–65, based communication regulations in 11 CFR 109.21(c) was candidate for Federal office, is publicly distributed on the Commission’s complete impermissibly narrowed by the coordination within 60 days before a general election for the exclusion of Internet communications regulation, thereby undermining the purposes of the office sought by the candidate, or within 30 days Act and thus providing an independent basis for before the primary election for that office, and is from this definition. After noting that invalidation under step two of the Chevron test. See targeted to the relevant electorate). Congress used the phrase ‘‘or any other Shays District at 70–71.

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NPRM addressing the definition of B. Comments on the Proposed Rule A few commenters expressed concern ‘‘public communication’’ in each of the Most commenters who addressed the that the proposed rule would allow remanded regulations. In the NPRM, the Shays District court’s requirement that corporations and labor organizations to Commission also noted that the term the Commission include some forms of make unregulated in-kind contributions ‘‘public communication’’ is Internet communications as ‘‘general to Federal candidates through incorporated into two other sections of public political advertising’’ expressed coordinated communications on the its regulations, 11 CFR 106.6(b) and (f) general support for the rule as proposed Internet, although such coordinated (allocation of expenses between Federal in the NPRM.23 These commenters communications would be regulated or and non-Federal activities by SSFs and praised the Commission’s proposed prohibited if done through other media. nonconnected committees), and 11 CFR separate treatment of communications One group of commenters listed 300.2(b)(4) (definition of ‘‘agent’’ for on a person’s own website as distinct activities of this nature that they non-Federal candidates). The from communications placed on another believed would be permitted under the Commission also proposed new person’s website, and nearly all proposed definition of ‘‘public exceptions from the definitions of commenters agreed that paid communication’’ in 11 CFR 100.26, ‘‘contribution’’ and ‘‘expenditure’’ to advertisements placed on another including: (1) An individual, political exempt volunteer and independent person’s website are ‘‘general public committee, or corporation pays to place activity on the Internet, and proposed 25 political advertising.’’ One commenter banner advertisements on another an additional clarification that certain noted that Congress had defined ‘‘public person’s website for a fee; (2) a Internet activities would qualify for the communication’’ in 2 U.S.C. 431(22) by corporation or labor organization pays media exemption. In addition, the listing several examples of media such for a pop-up advertisement that will Commission proposed revisions to its appear over another person’s website; 26 rules in 11 CFR 114.9 regarding as television, radio, billboards and newspapers. That commenter observed (3) an individual pays to hire a video employee use of corporate and labor production company to produce a video organization computers, software, and that communications through the listed forms of media are typically placed for that contains a message written by a other Internet equipment and services candidate for Federal office, purchases for individual Internet activities. a fee. The commenter concluded that it would be appropriate from a statutory an e-mail list, and sends the video to all III. 11 CFR 100.26—Definition of perspective for the Commission to the addresses on the purchased list; and ‘‘Public Communication’’ capture within the definition of ‘‘public (4) a State party committee pays to communication’’ only those Internet produce a video that refers solely to a A. Proposed 11 CFR 100.26 Published in candidate for Federal office and the NPRM communications placed for a fee on another person’s website. distributes the video only through its The Shays District decision required Another commenter generally own website. Each of these activities is the Commission to identify those supported the proposed rule, but addressed below. Internet communications that qualify as recommended that the definition also C. Revised Rule: Internet ‘‘general public political advertising,’’ encompass advertisements provided in Communications Placed on Another and thus would be encompassed within exchange for something of value other Person’s Website for a Fee Are ‘‘General the definition of ‘‘public than money (e.g., an advertising trade or Public Political Advertising’’ communication’’ in 2 U.S.C. 431(22). link exchange). Two other commenters, While drafting a proposed rule, the however, cautioned against including The Commission concludes that Commission recognized the important any Internet communications that do Internet communications placed on purpose of BCRA in preventing actual not involve the exchange of money. In another person’s website for a fee are and apparent corruption and the light of the unique nature and variety of ‘‘general public political advertising,’’ circumvention of the Act as well as the Internet communications, these and are thus ‘‘public communications’’ plain meaning of ‘‘general public commenters explained, the value of as defined in 11 CFR 100.26. Under this political advertising,’’ and the these communications would be rule, when someone such as an significant public policy considerations difficult to ascertain under the individual, political committee, labor that encourage the promotion of the Commission’s traditional tests for organization or corporation pays a fee to Internet as a unique forum for free or normal and usual charge or fair market low-cost speech and open information other large-quantity purchasers is the normal and value.24 exchange. The Commission was also usual charge that candidate’s committee is required to pay to purchase large quantities of the mindful that there is no record that organization or group of persons, but such term candidate’s book). Internet activities present any does not include the Federal Government or any 25 ‘‘Banner advertisements’’ are advertisements on significant danger of corruption or the authority of the Federal Government.’’ 2 U.S.C. a Web page that convey messages in text, animated appearance of corruption, nor has the 431(11). graphics, and sound. They traditionally appear in Commission seen evidence that its 2002 23 Several commenters argued that the rectangular shape, but may take any shape. Commission should preserve the status quo and Typically, banner advertisements are linked to the definition of ‘‘public communication’’ continue to exclude all Internet communications advertiser’s website, which enables a viewer to has led to circumvention of the law or from the definition of ‘‘public communication.’’ ‘‘click through’’ the advertisement to view the fostered corruption or the appearance The Commission does not believe that such an advertiser’s website for further information on the thereof. Therefore, the Commission approach would comport with the Shays District product or service advertised. See http:// proposed to treat paid Internet decision. www.netlingo.com/lookup.cfm?term=ad+banner 24 The ‘‘usual and normal charge for goods’’ is (last visited 3/24/06). advertising on another person’s website defined as ‘‘the price of those goods in the market 26 ‘‘Pop-up’’ advertisements usually appear in a as a ‘‘public communication,’’ but from which they ordinarily would have been separate browser window from the one being otherwise sought to exclude all Internet purchased at the time of the [contribution or viewed. The advertisements are superimposed over communications from the definition of expenditure],’’ and the ‘‘usual and normal charge the window being viewed, and require the viewer 22 for services’’ is defined as ‘‘the hourly or piecework to take some action, such as closing the window in ‘‘public communication.’’ charge for the services at a commercially reasonable which the pop-up advertisement appears, to rate prevailing at the time the services were continue viewing the underlying browser window. 22 The term ‘‘person’’ is defined to include ‘‘an rendered.’’ 11 CFR 100.57(d)(2) and 100.111(e)(2). See http://www.netlingo.com/ individual, partnership, committee, association, See, e.g., Advisory Opinion 2006–01 (Pac for a lookup.cfm?term=pop%2Dup%20ad (last visited 3/ corporation, labor organization, or any other Change) (discounted rate provided by publisher to 24/06).

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place a banner, video, or pop-up that form of media each time he or she English Language (4th ed. 2000) (‘‘The advertisement on another person’s wishes to make a communication. This activity of attracting public attention to website, the person paying makes a is also true for mass mailings and a product or business, as by paid ‘‘public communication.’’ Accordingly, telephone banks, which are other forms announcements in the print, broadcast the final rule is largely the same as the of ‘‘public communication’’ under 2 or electronic media.’’); The Random proposed rule. While no other form of U.S.C. 431(22). A communication to the House Webster’s Unabridged Dictionary Internet communication is included in general public on one’s own website, by (2d ed. 2005) (‘‘1. The act or practice of the definition of ‘‘public contrast, does not normally involve the calling public attention to one’s communication,’’ the placement of payment of a fee to an intermediary for product, service, need, etc., esp. by paid advertising on another person’s website each communication. announcements in newspapers and for a fee includes all potential forms of The cost of placing a particular piece magazines, over radio or television, on advertising, such as banner of political commentary on the Web is billboards, etc.; * * * 2. paid advertisements, streaming video, pop- generally insignificant. The cost of such announcements; advertisements.’’); J.I. up advertisements,27 and directed activity is often only the time and Richards and C. M. Curran, Oracles on search results.28 The rule thus resolves energy that is devoted by an individual ‘‘Advertising’’: Searching for a concerns about the first two activities to share his or her views and opinions Definition, 31 Journal of Advertising at described in the previous paragraph. with the rest of the Internet community. 3 (June 2002) (An extensive survey of The revised definition of ‘‘public In this respect, a communication advertising and marketing textbooks communication’’ comports with the through one’s own website is analogous revealed ‘‘certain recurring elements: (1) Shays District decision by removing the to a communication made from a Paid, (2) nonpersonal, (3) identified wholesale exclusion of all Internet soapbox in a public square. There is no sponsor, (4) mass media, and (5) communications from the definition of evidence in the legislative history of persuade or influence.’’) ‘‘public communication.’’ At the same BCRA of a Congressional intent to The Commission notes that this time, the rule is carefully tailored to regulate individual speech simply definition of ‘‘public communication’’ avoid infringing on the free and low- because it takes place through online encompasses the types of advertising cost uses of the Internet that enable media. that some commenters believed should individuals and groups to engage in Communications placed for a fee on be covered, such as payments by anyone political discussion and advocacy on another person’s website, however, are on behalf of a candidate or political equal footing with corporations and analogous to the forms of ‘‘public committee for advertising on another labor organizations (through their SSFs) communication’’ enumerated by person’s website. As discussed below, and other political committees, without Congress in 2 U.S.C. 431(23), this rule should be read together with the need to raise large amounts of funds. particularly in light of the growing other existing regulations regarding The forms of mass communication popularity of Internet advertising. As coordinated and independent enumerated in the definition of ‘‘public the public has turned increasingly to the expenditures and communications by communication’’ in 2 U.S.C. 431(22), Internet for information and corporations, labor organizations, and including television, radio, and entertainment, advertisers have political committees. newspapers, each lends itself to embraced the Internet and its new On the Internet, where individuals distribution of content through an entity marketing opportunities. Internet can build blogs and other websites for ordinarily owned or controlled by advertising revenue increased by 33.9 free, an individual can communicate another person. Thus, for an individual percent between the third quarter of with the general public at little or no to communicate with the public using 2004 and the third quarter of 2005 and cost. However, this is not true in the any of the forms of media listed by reached $3.1 billion for the third quarter case of paid advertising on another Congress, he or she must ordinarily pay of 2005.29 The cost of advertising on the person’s website. For example, one of an intermediary (generally a facility Internet distinguishes it from other the commenters operates a website and owner) for access to the public through forms of Internet communication, such sells advertising space for between as blogging or publishing one’s own $1,300 and $5,000 per week.30 Another 27 Although a pop-up advertisement may not website, which are generally performed commenter stated that the ‘‘minimum to technically be part of the underlying website or for free or at low cost. run a banner ad campaign on most account, the Commission determines that it is Moreover, because Congress did not newspaper websites and portals is ‘‘placed on’’ a website such that it qualifies as a ‘‘public communication’’ when a fee is paid for the include the Internet in the list of media roughly $5,000.’’ The Chicago Tribune, pop-up. enumerated in the statutory definition for example, charges $5,000 per week 28 For example, companies such as Google and of ‘‘public communication,’’ an Internet for a ‘‘header ad’’ on Yahoo! permit an advertiser to pay a fee to have its communication can qualify as a ‘‘public www.chicagotribune.com, and $20,000 website appear as a ‘‘sponsored link,’’ or otherwise communication’’ only if it is a form of featured, when specific words are typed into the per week for a ‘‘homepage cube.’’ See website’s search engine. See http:// advertising and therefore falls within www.tribuneinteractive.com/chicago/ www.google.com/intl/en/webmasters/1.html (last the catch-all category of ‘‘general public mediakit/rates.htm (last visited 3/24/ visited 3/24/06) and http:// political advertising.’’ See 2 U.S.C. 06). Although paying for an searchmarketing.yahoo.com/srch/index.php (last 431(22). By definition, the word visited 3/24/06). If a fee is paid for such a service, advertisement on Chicagotribune.com then the resulting display of the product, hyperlink, ‘‘advertising’’ connotes a may be less expensive than paying to or other message constitutes a form of ‘‘general communication for which a payment is place the same advertisement in the public political advertising.’’ However, when the required, particularly in the context of Chicago Tribune newspaper, both still search results are displayed as a result of the campaign messages. See, e.g., The require substantial funding. normal function of a search engine, and not based  on any payment for the display of a result, the American Heritage Dictionary of the Furthermore, in both cases the search results are not forms of ‘‘general public advertiser is paying for access to an political advertising.’’ In addition, where a search 29 See Interactive Advertising Bureau, ‘‘Internet established audience using a forum engine returns a website hyperlink in its normal Advertising Revenues Surpass $3 Billion for Q3; course, and features the same hyperlink separately Run Rate for Full Year 2005 on Pace to Exceed $12 controlled by another person, rather as the result of a paid sponsorship arrangement, the Billion’’ (Nov. 21, 2005), available at http:// latter is a ‘‘public communication’’ while the former www.iab.net/news/pr_2005_11_21.asp (last visited 30 See http://www.dailykos.com/special/ is not. 3/24/06). advertising (last visited 3/24/06).

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than using a forum that he or she into the definition of ‘‘public Commission’s enforcement decisions, controls to establish his or her own communication.’’ The result of the and here, the Commission will be audience. commenter’s proposed change would be additionally mindful of the importance Three commenters requested a that ‘‘Internet advertising placed for a of minimizing any potential regulatory clarification regarding the proposed fee’’ would be a form of ‘‘general public burden on the use of the Internet. rule’s exclusion of all Internet political advertising.’’ That approach ‘‘communications’’ with the exception would appear to indicate that there are E. Advertiser, Not Web Site Operator, of certain paid ‘‘announcements,’’ and forms of advertising on the Internet Makes the ‘‘Public Communication’’ asked whether the Commission other than paid advertising, which is One commenter requested that the intended to attach any significance to contrary to the Commission’s view and the use of ‘‘announcements’’ instead of to the basis of the revised definition of Commission clarify that the person who ‘‘communications’’ in the exception. ‘‘public communication,’’ which rests makes a ‘‘public communication’’ is the The Commission did not intend any on the definition of ‘‘advertising’’ as a person seeking to place an Internet distinction through the use of different paid communication. advertisement on another person’s Web terms. To avoid confusion, the site, not the person controlling the Web Commission has substituted D. No Threshold Payment Amount for site on which the advertisement ‘‘communication’’ in place of ‘‘General Public Political Advertising’’ appears. The Commission agrees that ‘‘announcement’’ in the final rule. Several commenters argued that low- this is the intended operation of the rule One of the commenters suggested cost ‘‘pay-per-click’’ ads are too difficult and notes that the regulations that adding a content requirement to the to value because the cost of the incorporate the term ‘‘public Commission’s definition of ‘‘public advertisement is often variable, communication’’ clearly regulate the communication’’ by substituting the measured after the fact, and too low to person paying for the ‘‘public term ‘‘express advocacy’’ 31 for warrant regulation as a ‘‘public communication.’’ See 11 CFR ‘‘announcement’’ and communication.’’ For example, one 100.24(b)(3) and (c)(1), 106.6, 109.21, ‘‘communication.’’ The Commission is commenter pointed to advertising 109.37, 110.11, 300.2, 300.32(a)(1) and not limiting the definition of ‘‘public opportunities available for $10–$25 per (2), and 300.71. For example, if a communication’’ by requiring any week through BlogAds.com. political party committee pays an particular content, such as ‘‘express Commenters urged the Commission to Internet advertising company to place a advocacy.’’ There is no content revise the definition of ‘‘public pop-up advertisement on a certain Web communication’’ to capture only paid requirement in the statutory definition site, or to place the pop-up of ‘‘public communication,’’ and there is Internet ads that cost more than a advertisement in a manner that it will no other basis for providing an certain threshold dollar amount. One of be triggered based on some other action additional content standard in the these commenters recommended that of a computer user, the political party definition itself, whether the the Commission seek additional communications are made through the comment to determine the appropriate committee—not the advertising Internet or another medium. See 2 threshold amount and to index that company or the Web site owner—would U.S.C. 431(22). The content of the resulting amount for inflation or re- be subject to the applicable restrictions communication is addressed separately, examine the amount on a regular basis. on ‘‘public communications.’’ The such as the requirement that a State, The Commission is not establishing a Commission also notes that, as with district, or local party committee use minimum threshold amount in the final other media included in the definition only Federal funds to pay for ‘‘public rule. There is no stated threshold of ‘‘public communication,’’ the communications’’ that PASO a Federal payment amount in the statutory obligation to ensure that permissible candidate. See, e.g., 2 U.S.C. 431(20); 11 definition of ‘‘public communication,’’ sources are used rests with the entity CFR 100.24(b)(3) and (c)(1), 300.32(a)(1) and it is not clear on what statutory whose funding is restricted by FECA, and (2), and 300.71. Thus, limiting the basis the Commission could establish and not the Web provider. one. Nor was the Commission able to definition of ‘‘public communication’’ F. Bloggers Not Addressed Separately to only those communications establish a record that would justify a containing ‘‘express advocacy’’ would particular threshold. Congress could In the NPRM, the Commission noted be inconsistent with the Act’s have chosen, but did not, to establish a that its proposed regulations were recognition in section 431(20) that some specific threshold cost below which an unlikely to cover blogging activities. ‘‘public communications’’ contain advertisement would not be a ‘‘public Nevertheless, the Commission asked PASO messages, but not express communication.’’ Thus, even late-night whether it should revise the proposed advocacy. advertisements on small radio stations, rule to explicitly exclude all ‘‘blogs’’ A different commenter suggested low-cost classified ads in small from the definition of ‘‘public circulation newspapers, and low-cost substituting ‘‘advertising’’ in place of communication.’’ Each of the bloggers billboards in relatively remote areas are ‘‘communication.’’ The Commission is who testified at the hearing, and the forms of ‘‘public communication’’ under not adopting this suggestion because it majority of commenters who addressed 2 U.S.C. 431(13). Accordingly, all is circular and could inject ambiguity this issue, warned against crafting a Internet communications placed for a regulation tied to specific forms of 31 fee on another person’s Web site qualify The term ‘‘expressly advocating’’ is defined in Internet communication like blogging. 11 CFR 100.22 to include phrases such as ‘‘vote for as ‘‘public communications.’’ the President, re-elect your Congressman,’’ and Nevertheless, as a matter of One commenter noted that while at other slogans and words ‘‘which in context can enforcement policy, the Commission present blogs might be readily have no other reasonable meaning than to urge the distinguished from other Web sites election or defeat of one or more clearly identified may exercise prosecutorial discretion candidate(s),’’ or that, ‘‘when taken as a whole and regarding ‘‘public communications’’ on based on particular software used to with limited reference to external events such as the the Internet that involve insubstantial generate the blog, that software is likely proximity to the election, could only be interpreted advertising charges. The amount to change. Moreover, this commenter by a reasonable person as containing advocacy of noted that other forms of the election or defeat of one or more clearly claimed to have been spent in violation identified candidates.’’ of law is always a factor in the communications, such as peer-to-peer

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‘‘podcasting,’’ 32 may soon replace blogs comment, however, on the appropriate The Commission agrees that the as the ubiquitous format for low-cost treatment of advertisements placed for a relationship between a third-party Internet discussion and debate. Another fee by a third-party advertiser on a advertiser and members of a commenter cautioned that providing corporation’s or labor organization’s corporation’s or labor organization’s special protection for bloggers might Web site that is solely available to its restricted class, or members of a disadvantage others engaged in different restricted class, or on a membership membership organization, is not yet analogous forms of Internet organization’s Web site available only to sufficiently distinctive to warrant a communication. its members. Specifically, the special exception to the definition of In light of the evolving nature of Commission asked whether such ‘‘public communication.’’ Therefore, a Internet communications, the advertisements should be excluded from paid Internet advertisement is a ‘‘public Commission is not explicitly excluding the definition of ‘‘public communication’’ even if the from the definition of ‘‘public communication.’’ NPRM at 16971. For advertisement is available only to the communication’’ any particular software example, if a political party committee restricted class of a corporation or labor or format used in Internet pays to place an advertisement on a organization, or the members of a communications. The final rules already labor organization’s password-protected membership organization. exclude ordinary blogging activity from Web site that is available only to that the definition of ‘‘public H. Electronic Mail is Not a Form of labor organization’s restricted class, ‘‘General Public Political Advertising’’ communication’’ because blog messages should that advertisement be considered are not placed for a fee on another a ‘‘public communication’’? The definition of ‘‘public person’s Web site. Thus, an explicit The Commission concludes that it communication’’ proposed in the NPRM exclusion focused on ‘‘blogging’’ is not should. There is no basis in the Act or did not encompass any e-mail only unnecessary but also potentially the Shays District decision to justify communications. None of the confusing to the extent that it implies such an exception to the definition of commenters specifically addressed this that other forms of Internet ‘‘public communication.’’ Moreover, aspect of the proposed rule, other than communication, such as ‘‘podcasting’’ three of the four commenters addressing to state their general agreement with the or e-mailing, might be regulated absent this issue opposed a special exclusion limited scope of the proposed rule. The Commission does not consider e- an explicit exclusion for each different on the grounds that a third-party mail to be a form of ‘‘general public form of Internet communication. advertiser does not have a special political advertising’’ because there is relationship with members of the G. Paid Advertising on a Web Site Is a virtually no cost associated with restricted class of a corporation or labor Form of ‘‘General Public Political sending e-mail communications, even organization that could justify treating Advertising’’ Even Where the Web Site thousands of e-mails to thousands of Web site advertisements to this group of Is Only Available to the Restricted Class recipients, and there is nothing in the individuals differently than other paid of a Corporation or Labor Organization, record that suggests a payment is Internet advertisements.35 One of these or the Members of a Membership normally required to do so.36 All of the commenters, a labor organization, Organization forms of ‘‘public communication’’ explained that ‘‘by definition, the payor The revision to the definition of expressly listed by Congress normally of this sort of political advertising is a ‘‘public communication’’ does not affect involve at least some charge for stranger to the restricted class that is the the regulations governing corporate or delivery, such as telephone charges or audience, and because that is so, we do labor organization communications postage. not believe that under that circumstance within and outside of its restricted In addition, Congress does not view e- a blanket exemption would be class,33 or with the ability of a mail in the same manner as mass appropriate.’’ membership organization to mailings. The House of Representatives’ communicate with its members on any franking rules place various franking 34 endorse Federal candidates on their Web sites in restrictions on an ‘‘unsolicited mass subject. The Commission sought the normal course of releasing a press release so long as the press release is distributed in the normal communication,’’ which relies on a 32 ‘‘Podcasting’’ is a form of file distribution that manner and the organizations make efforts to allow threshold (500 or more is currently used primarily to distribute audio files, only de minimis exposure of their Web sites beyond communications) that is almost like a radio program, over the Internet in a format their restricted classes. See 11 CFR 114.4(c)(6) and identical to the threshold in ‘‘mass that can be received and played through an Apple Advisory Opinion 1997–16. Thus, corporations, iPod or similar device. See http://www.ipodder.org/ labor organizations, and membership organizations mailing’’ at 2 U.S.C. 431(23). Although whatIsPodcasting (last visited 3/24/06). may expressly advocate the election or defeat of a mass e-mail communications were 33 The ‘‘restricted class’’ of a corporation is its clearly identified Federal candidate on the subject to the restrictions at the time stockholders and executive or administrative corporate or labor organization Web sites that are BCRA was enacted, on September 5, personnel, and their families, and the executive and solely available to their respective restricted class. administrative personnel of its subsidiaries, See discussion of revisions to 11 CFR 100.132 in 2003, the Committee on House branches, divisions, and departments and their section IX, below, and 11 CFR 114.5(g); see also Administration revised its own franking families. 11 CFR 114.1(j); see also 11 CFR 114.1(c). Advisory Opinions 2000–07 (Alcatel USA, Inc.) rules to remove mass e-mail The ‘‘restricted class’’ of a labor organization is its (corporation permitted to solicit its restricted class communications from the list of members and executive or administrative by providing a password to members of the personnel, and their families. Id. restricted class and limiting access to its Web site ‘‘unsolicited mass communications’’ 34 Under the Act and Commission regulations, solely to those password holders) and 1997–16 corporations and labor organizations may (membership organization prohibited from making 36 Numerous e-mail service providers, such as communicate with members of their restricted class a list of candidate endorsements available on its Hotmail, Google, and Yahoo!, provide free Web- on ‘‘any subject.’’ See 2 U.S.C. 431(9)(B)(iii) and Web sites unless it limited access to the list to its based e-mail accounts that permit a user to receive 441b(b)(2)(A); 11 CFR 100.134(a) and 114.3(a); see members only). and send thousands of e-mail messages without also Advisory Opinion 1997–16 (Oregon Natural 35 The other commenter addressing the issue charge. See http://join.msn.com/?page=hotmail/ Resources Council Action). Membership supported an exception covering communications plans&pgmarket (last visited 3/24/06), http:// organizations may similarly communicate with ‘‘from corporations and labor organizations to their mail.google.com/mail/help/about.html (last visited their members. Id. Corporations, labor restricted classes.’’ These communications, 3/24/06), http://dir.yahoo.com/ organizations, and membership organizations are however, would not result in a ‘‘public Business_and_Economy/Business_to_Business/ generally prohibited, however, from making communication’’ under the proposed or final rules Communications_and_Networking/ communications to the general public in connection because they are not communications placed on Internet_and_World_Wide_Web/E-mail_Providers/ with a Federal election, but they may publicly another person’s Web site for a fee. Free_E-mail (last visited 3/24/06).

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requiring pre-authorization from the J. No Separate Definition of ‘‘Public State party committee’s frequent Franking Commission. See ‘‘Meeting to Communication’’ for Web Sites of State, changes to its Web site content. Not Approve New Electronic District, and Local Party Committees only would the determination of the Communications Policy’’ at http:// Although the revised definition of appropriate portion require a snapshot www.access.gpo.gov/congress/house/ ‘‘public communication’’ encompasses of a Web site at one particular time that house08bm108.html. While not only those Internet communications that would render the result somewhat controlling in this rulemaking, the e- are placed for a fee on another person’s arbitrary and inaccurate in light of the mail exclusion is indicative of a Web site, the NPRM sought comment on frequently changing content on the Web Congressional view that e-mail is whether the definition should be further site, but it could also be easily appropriately regulated differently than expanded to encompass all Web sites of manipulated because of the ease and postal mail. Accordingly, the revised State, district, and local party low cost of generating new Web pages. definition of ‘‘public communication’’ committees. The Commission concludes For example, any percentage-based does not encompass e-mail that it should not. system (percentage of Web pages or Web communications. BCRA defines ‘‘Federal election space dedicated to Federal candidates) activity’’ to include ‘‘a public would require a calculation of the total I. Costs of Producing Videos and Other communication that refers to a clearly number of Web pages or files Content for Communications identified candidate for Federal office comprising the party committee Web site. The logistical hurdles to this Under the Commission’s revised rules * * * and that promotes or supports a candidate for that office, or attacks or approach, coupled with the difficulty in at 11 CFR 100.26, posting a video on a opposes a candidate for that office[.]’’ 2 determining the costs to be allocated, Web site does not result in a ‘‘public U.S.C. 431(20)(A)(iii) (emphasis added); underscore the Commission’s decision communication’’ unless it is placed on see also 11 CFR 100.24(b)(3). State, not to proceed in this fashion. another person’s Web site for a fee. district, and local political party The commenter also warned that Nevertheless, one group of commenters committees and organizations and their treating a State, district, or local party called on the Commission to clarify the agents, as well as State and local committee Web site as a ‘‘public treatment of expenses by State, district officeholders and candidates and their communication’’ would deter these or local party committees for the agents, are prohibited from using any party committees from featuring Federal production costs of videos and other non-Federal funds to pay for this type candidates or participating in ‘‘generic content displayed only on those of FEA. See 2 U.S.C. 441i(b) and (f); 11 campaign activity’’ at all on their Web committee’s own Web sites. The CFR 100.24(b)(3) and (c)(1), 300.32(a)(1) sites. The commenter explained that commenters observed that the and (2), and 300.71. even if a party committee’s Web site Commission generally treats the costs of In the NPRM, the Commission PASOs a Federal candidate on only a producing campaign-related materials as explained that one reason it had small portion of its Web site, such as a subject to the same funding limits and originally excluded Internet activities few lines on one Web page for a period source prohibitions as the costs of from the definition of ‘‘public of a few days, the committee would distributing the materials. For example, communication’’ in 11 CFR 100.26 was have to file monthly reports with the the direct costs of producing an to permit State, district, and local party Commission for the remainder of the ‘‘electioneering communication’’ are committees to refer to their Federal calendar year.37 treated the same as the costs of candidates on the committees’ own Web distributing the communication and are sites or post generic campaign messages 37 No commenters or witnesses supplied included within the costs of that without requiring that the year-round comments that would assist the Commission in determining how a State, district, or local party communication. 11 CFR 104.20(a)(2) costs of maintaining the Web site be committee would pay for a Web site that was (‘‘costs charged by a vendor, such as paid entirely with Federal funds. NPRM captured under the definition of ‘‘public studio rental time, staff salaries, costs of at 16971. The record in this rulemaking communication.’’ The statute and regulations do demonstrates that State, district, and not require a local party committee to pay for all video or audio recording media, and of its ‘‘public communications’’ with Federal funds, talent’’). local party committees generally use only those that PASO a Federal candidate or their Web sites to promote a variety of Because the Commission is otherwise constitute FEA, such as ‘‘generic party policies and candidates, and that campaign activity.’’ The Commission asked in the promulgating regulations that will place these Web sites are not predominantly NPRM how the organizations would go about funding limits and source prohibitions focused on Federal elections. allocating the costs associated with the Web site if on some specific content when it is the Commission determined that Web sites for these Furthermore, given the ease of adding organizations are ‘‘public communications.’’ Some placed for a fee on a third-party’s Web new Web pages to a Web site or altering commenters who supported including State, site, a State party committee that pays the content of existing Web pages, both district, and local party committee Web sites in the to produce a video that PASOs a Federal the number of Web pages within a Web definition of ‘‘public communication’’ suggested candidate will have to use Federal funds that a time/space allocation would be appropriate. site and the content of those pages However, the Commission is not convinced that the when the party committee pays to place change frequently, sometimes daily or statute permits time/space allocation of any ‘‘public the video on a Web site operated by even hourly. For example, a Federal communication’’ that features PASO information another person. This is entirely about a Federal candidate. The existence of PASO candidate might be featured on a would require the organizations to pay for the consistent with how the party hyperlink from the home page of a State ‘‘public communications,’’ i.e., the Web site itself, committee would be required to pay for party committee Web site one day, but entirely with Federal funds. Such a result is a communication that it distributes that hyperlink may be removed the next inconsistent with the Act’s regulation of Federal, through television or any other medium but not non-Federal activity. For example, such a day as the party committee replaces it determination could have a ripple effect on the that is a form of ‘‘public with a more current story. payment of other costs. The acquisition of the communication.’’ In such One commenter supporting the computers or the phone line (two costs that are circumstances, the party committee proposed rule argued that it would be generally allocated as administrative expenses) must pay the costs of producing and arguably could become expenses that would be difficult, if not impossible, to identify a required to be paid for entirely with Federal funds distributing the video entirely with severable ‘‘Federal’’ portion of a State because one of the uses of the equipment would be Federal funds. See 11 CFR 300.32(a)(2). party committee Web site in light of a to access or maintain a Web site.

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Three other groups of commenters, ‘‘public communication’’ differently for finance such activities with Federal however, advocated for a definition of different persons, whether they be funds or a mix of Federal funds and ‘‘public communication’’ that included individuals, groups, or political party Levin funds. 2 U.S.C. 441i(b) and the individual Web sites of State, committees. Instead, because Congress 431(20)(A); 11 CFR 100.24 and 300.33. district, and local party committees. provided only one broadly applicable As noted above, the Shays District They argued that the term ‘‘general definition of ‘‘public communication,’’ court remanded the Commission’s public political advertising’’ should be the Commission is not free to conclude definition of ‘‘generic campaign defined differently with respect to that a communication made through the activity’’ on two grounds: first, that by different speakers, applying a broad same media is a ‘‘public incorporating the Commission’s definition of ‘‘general public political communication’’ when made by an definition of ‘‘public communication’’ it advertising’’ to encompass less activity individual, but not when made by a improperly excluded all Internet by individuals, but more Internet political committee. Conversely, the communications, and second, for lack of activity by State, district, and local party Commission cannot conclude that a notice to the public that the definition committees, other political committees, communication is not a ‘‘public would be limited to ‘‘public corporations, and labor organizations.38 communication’’ when made by an communications’’ as defined in 11 CFR One group asserted that State, district, individual, but is a ‘‘public 100.26. The Commission did not appeal and local party committees should be communication’’ if made by a party these holdings. particularly restricted by a broad committee through the same media. The Commission is addressing the definition of ‘‘public communication’’ The definition of ‘‘public Shays District court’s first concern by because Congress used the term ‘‘public communication’’ at 2 U.S.C. 431(22) is revising the definition of ‘‘public communication’’ in BCRA to restrict the just that: a definition. Congress could communication’’ to include paid use of non-Federal funds by State, have, but did not, define the ‘‘public advertisements placed on another district, and local party committees. See communication’’ differently with person’s Web site, as explained above. 2 U.S.C. 431(20)(A)(iii) and 441i(b). respect to different speakers. Instead, The Commission has addressed the The Commission disagrees with these Congress chose to distinguish between Shays District court’s second concern by latter commenters and is not including different speakers only when providing ample notice in the NPRM content placed by a State, district, or establishing the consequences of making that it was considering defining local party committee on its own Web a ‘‘public communication.’’ The ‘‘generic campaign activity’’ in terms of site within the definition of ‘‘public different treatment of different speakers a ‘‘public communication.’’ Therefore, communication.’’ As explained above, a is therefore provided separately in the the Commission is adopting a final rule political party committee’s Web site Act, rather than in the definition of that has the same language as the cannot be a form of ‘‘public ‘‘public communication’’ itself. See 2 previous rule and the rule proposed in communication’’ any more than a Web U.S.C. 431(20)(A)(iii) (including ‘‘public the NPRM. site of an individual can be a form of communication’’ in the definition of Two commenters addressed the ‘‘public communication.’’ In each case, ‘‘Federal election activity’’), 2 U.S.C. Commission’s proposal to retain the the Web site is controlled by the 441i(b) and (f) (prohibiting State, current definition of ‘‘generic campaign speaker, the content is viewed by an district, and local party committees, and activity.’’ Both commenters urged the audience that sought it out, and the State and local candidates, but not other Commission to adopt a definition that speaker is not required to pay a fee to political committees or individuals includes activities beyond ‘‘public place a message on a Web site other than candidates or officeholders, communications.’’ One commenter controlled by another person. from paying for FEA with non-Federal suggested that the proposed definition More importantly, Congress defined funds), and 2 U.S.C. 434(e)(2) (requiring of the term ‘‘generic campaign activity’’ ‘‘public communication’’ in terms of the State, district, and local party would improperly narrow the types of media used to convey a committees to report receipts and application of the term, thereby message (e.g., newspaper, magazine, disbursements for FEA that total at least permitting State, district, and local party broadcast, mass mailing, phone bank), $5,000 per calendar year). committees to use non-Federal funds for not the identity of the speaker using that many activities that promote the IV. 11 CFR 100.25—Definition of political party (and thereby indirectly media. 2 U.S.C. 431(22). There is simply ‘‘Generic Campaign Activity’’ Is Not no statutory support for defining promote the party’s Federal candidates) Changed because the promotion does not occur in 38 One of these commenters called for limited BCRA defines ‘‘generic campaign a ‘‘public communication.’’ Specifically, rules focused exclusively on communications activity’’ as ‘‘campaign activity that this commenter urged the Commission coordinated with corporations, while excluding all promotes a political party and does not to adopt a broader definition, one other communications. A different commenter promote a candidate or non-Federal covering ‘‘all generic ‘‘activities’’’ of urged the Commission to establish a separate rule for communications by State party committees on candidate.’’ 2 U.S.C. 431(21). In 2002, as State, district, and local political party the grounds that ‘‘campaign finance laws provide part of a rulemaking implementing committees, such as phone banks and for different levels of regulation of individuals, BRCA, the Commission defined mailings to 500 or fewer people, and corporations and labor unions, and political ‘‘generic campaign activity’’ to mean ‘‘a State, district, and local political party committees (including party committees).’’ The four principal Congressional sponsors of BCRA asserted public communication that promotes or Web sites. that the definition of ‘‘general public political opposes a political party and does not The Commission does not believe that advertising’’ applicable to State party committees promote or oppose a clearly identified expanding the definition of ‘‘generic should encompass all Internet communications Federal candidate or a non-Federal campaign activity’’ beyond ‘‘public ‘‘intended to be seen by the general public.’’ Similarly, a different group of commenters stated candidate.’’ 67 FR 49064, 49111; 11 CFR communication’’ is a sound policy that a political committee should be deemed to 100.25 (emphasis added). The Act decision or the result required by the make a ‘‘public communication’’ whenever it requires State, district, and local party Act. First, the Commission has not seen ‘‘spends funds to communicate broadly over the committees that conduct ‘‘generic any evidence that its 2002 definition of Internet—buying Web site ads, sending e-mails, maintaining its own publicly accessible Web site— campaign activity’’ in connection with ‘‘generic campaign activity’’ has led to * * * just as if it were spending funds to an election in which a candidate for circumvention of the Act or fostered communicate by broadcast or mass mailing.’’ Federal office appears on the ballot to corruption or the appearance thereof,

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nor did the commenters point to any particularly in excluding activities such supported the Commission’s decision to specific real-world examples where the as small phone banks and mailings. Id. reconsider the coordinated definition of ‘‘generic campaign Therefore, the Commission has communication rules in a separate activity’’ has proven too narrow. decided to retain the current definition rulemaking dedicated to that purpose. of ‘‘generic campaign activity’’ at 11 Second, a broad definition of ‘‘generic A. In-Kind Contributions campaign activity’’ would exceed the CFR 100.25. The final rule is unchanged scope of the Act and pose Constitutional from the language proposed in the The Commission would also like to concerns by capturing State, district, NPRM. ‘‘Generic campaign activity’’ reiterate that current regulations at 11 and local party activities designed to will continue to mean a ‘‘public CFR 100.52(d)(1) make clear that the support only State or local candidates, communication,’’ as defined in 11 CFR provision of goods or services ‘‘without charge or at a charge that is less than the thereby improperly requiring that State, 100.26, that promotes or opposes a usual or normal charge for such goods district, and local parties finance these political party and does not promote or or services’’ is a contribution. The activities with at least some Federal oppose a clearly identified Federal or non-Federal candidate. Commission does not view the ‘‘public funds. For example, a State party communication’’ rule it is promulgating committee that rents a bus to transport V. 11 CFR 109.21 and 109.37— to permit vendors who normally charge the party’s slate of candidates for the Definitions of Coordinated for advertising space to provide such State’s executive offices during a State Communications and Party advertising space at a reduced charge or election occurring contemporaneously Coordinated Communications free of charge without making a with a Federal election, would be To be a ‘‘coordinated contribution. required to use Federal funds or a mix communication’’ or a ‘‘party While the Commission recognizes that of Federal and Levin funds to pay for coordinated communication,’’ a online business practices for the the bus because providing the bus communication must be a ‘‘public charging of advertising space vary would constitute support of the party communication’’ as defined in 11 CFR greatly from one website to the next, the and its choice of candidates without 100.26.40 See 11 CFR 109.21(c) and 11 Commission would also like to make clearly identifying any of the CFR 109.37(a)(2). In Shays District, the clear that when the customary business candidates. The Commission does not court rejected the definition of the term practice of a particular website consider these results to be required by ‘‘public communication,’’ because the regarding the payment for space is not the Act. effect of the definition was to exclude followed, the vendor is making an in- The commenters also argued that the all Internet communications from the kind contribution. This is similarly the use of the term ‘‘public communication’’ reach of the coordinated communication case when any organization transfers to creates a definition of ‘‘generic rules. See Shays District at 70.41 a political committee a tangible asset, campaign activity’’ that is too narrow By including Internet advertising such as an e-mail list. There is no need because it does not cover all placed for a fee on another person’s to show that a coordinated communications, specifically ‘‘mailing website in the definition of ‘‘public communication resulted from such a and phone banks directed to fewer than communication’’ in 11 CFR 100.26, the transfer for the actual asset to be an in- 500 [sic] people.’’ The plaintiffs in Commission is addressing the kind contribution to that committee. Shays District made this same argument. deficiency identified by the Shays B. Republication of Campaign Materials District court in the coordinated The Commission countered that under The Commission sought comment communication rules. Consequently, the such an argument, a series of about the republication of candidate Commission is not amending the substantially similar telephone calls campaign materials on the Internet. language of the coordinated made to 500 or fewer persons could be Under the existing coordinated communication rules in this regulated as FEA if they promote a communication rules, the content prong rulemaking. political party, even if they do not can be satisfied by a ‘‘public In the NPRM, the Commission did not mention Federal candidates, whereas communication that disseminates, propose any changes to the coordinated the same number of substantially distributes, or republishes, in whole or communication rule or the party similar telephone calls that do promote in part, campaign materials prepared by coordinated communication rule. The or oppose a specific Federal candidate a candidate, the candidate’s authorized 39 Commission did, however, invite would not be regulated as FEA. The committee, or an agent of any of the comments on a number of issues with Shays District court specifically rejected foregoing.’’ 11 CFR 109.21(c)(2). Several respect to the two rules. The comments the plaintiff’s argument and agreed with commenters urged the Commission to that the Commission received generally the Commission’s reasoning, stating: ‘‘It ensure that the republication of content would indeed be anomalous for from a candidate’s website, or the Congress to have placed greater 40 As noted above, an ‘‘electioneering communication’’ may also be a coordinated republication of other campaign strictures on activities that promote communication. See 2 U.S.C. 441a(a)7)(C); 11 CFR materials prepared by candidate, would political parties than on activities that 109.21(c)(1). However, ‘‘electioneering not result in a ‘‘coordinated support or attack a candidate.’’ Shays communications’’ are a subset of ‘‘public communication’’ when the District at 111. Accordingly, the Shays communications.’’ 41 The Court of Appeals found that the republication occurs on a blogger’s or District court found that the Commission had provided inadequate justification individual’s own website. Commission’s definition of ‘‘generic under the APA for excluding from the coordinated Testimony submitted during the campaign activity’’ was appropriate and communication rules certain ‘‘public rulemaking indicated that the approach reasonable in the context of FEA, communications’’ that are publicly distributed or otherwise publicly disseminated more than 120 outlined in the NPRM would be days before an election. See Shays Appeal at 100. appropriate. As one of the lawyers for 39 A telephone bank that supports or opposes a The Commission initiated a separate rulemaking on the Plaintiffs in the Shays litigation Federal candidate would be regulated as an the coordinated communication rules to address pointed out, the restrictions on additional form of FEA, which is a ‘‘public that issue. See Coordinated Communication Notice communication’’ that PASOs a clearly identified of Proposed Rulemaking, 70 FR 73946 (Dec. 14, republication of campaign materials Federal candidate. 2 U.S.C. 431(20(A)(iii); 11 CFR 2005). The Shays Appeal decision did not address were not promulgated with the Internet 100.24(b)(3). the definition of ‘‘public communication.’’ in mind. Because an individual need

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not incur any cost in downloading not, in and of itself, translate into a of ‘‘public communication’’ was limited information derived from a candidate’s coordinated communication finding. to advertisements placed for a fee on website and reproducing that same The conduct prong must also be another person’s website as proposed in information on a different website, satisfied. See 11 CFR 109.21(d). the NPRM. republication on the Internet is The Commission also notes that this Moreover, Congress has required fundamentally different from provision does not supersede the disclaimers for all forms of ‘‘general republication in other contexts, such as limitations and prohibitions placed on public political advertising’’ that if an individual were to pay to reprint disbursements for communications by contain certain content or are paid for a candidate’s campaign literature. corporations and labor organizations by a political committee. 2 U.S.C. The revision to the definition of under 2 U.S.C. 441b and 11 CFR Part 441d(a). As the Commission explained ‘‘public communication’’ in 11 CFR 114. in its original post-BCRA disclaimer 100.26 adequately addresses those VI. 11 CFR 110.11—Scope of Disclaimer rulemaking, the use of the same catch- commenters’ concerns, so no changes Requirements all phrase in the definition of ‘‘public are required to the definition of communication’’ and the disclaimer ‘‘coordinated communication.’’ The The Commission’s disclaimer rules requirements ‘‘should be interpreted in definition of ‘‘public communication’’ promulgated in 2002 apply to ‘‘public a virtually identical manner.’’ 43 See 2 does not encompass any content, communications,’’ as defined in 11 CFR U.S.C. 441d(a) and 431(22). The including republished campaign 100.26, as well as to two specified Commission is therefore retaining the material, that a person places on his or additional types of Internet disclaimer requirement for any ‘‘public her own website. Therefore, a person’s communications: unsolicited electronic communication’’ that includes the republication of a candidate’s campaign mail of more than 500 substantially content specified in 11 CFR 110.11(a). materials on his or her own website, similar communications and Internet blog, or e-mail cannot constitute a websites of political committees In their comments, the Congressional ‘‘coordinated communication.’’ available to the general public. See 11 sponsors of BCRA urged the The Commission is taking this CFR 110.11(a); see also 2 U.S.C. 441d(a). Commission to retain the current approach partly in recognition of the Whether a ‘‘public communication’’ additional requirement that all political ease with which individuals are able to requires a disclaimer depends on who committee websites include disclaimers. transmit information over the Internet. makes the ‘‘public communication’’ and The Commission did not receive any Exchanging hyperlinks, forwarding what the ‘‘public communication’’ says. other comments specifically addressing e-mail, and attaching downloaded PDF Under the 2002 rule, a political the disclaimer requirement for political files are common ways most individuals committee must include a disclaimer on committee websites, and did not who use the Internet exchange any ‘‘public communication’’ for which propose changing that requirement in information. The Commission is taking it makes a disbursement, as well as on the NPRM. Accordingly, under the this opportunity to make clear that such all of its publicly available websites and revised rules at 11 CRR 110.11, all activity would not constitute in-kind on all substantially similar, unsolicited political committee websites must contributions. The Commission notes e-mail communications to more than continue to include the appropriate that Senator Russ Feingold, one of 500 people. See 11 CFR 110.11(a)(1). disclaimer statements. Under the 2002 rule, when persons BCRA’s sponsors, stated recently that This treatment of political committee other than political committees make a ‘‘linking campaign Web sites, quoting websites is consistent with Congress’s ‘‘public communication’’ or send from, or republishing campaign broader disclaimer requirements for substantially similar e-mail messages to materials and even providing a link for political committees. In 2 U.S.C. more than 500 persons, they need only donations to a candidate, if done 441d(a), Congress required a disclaimer include disclaimers when those without compensation, should not cause ‘‘[w]henever a political committee communications expressly advocate the a blogger to be deemed to have made a makes a disbursement’’ for a class of election or defeat of a clearly identified contribution to a campaign or trigger communications, regardless of the candidate for Federal office, solicit reporting requirements.’’ 42 content of the communication. In contributions, or qualify as However, if a person pays to contrast, for all other persons, Congress ‘‘electioneering communications’’ under republish a candidate’s campaign only required a disclaimer if the 11 CFR 100.29. See 11 CFR materials on another person’s website, a communication contains specific 110.11(a)(2)–(4). Persons other than ‘‘public communication’’ would result content, such as a solicitation of political committees are not required to under revised 11 CFR 100.26, and such contributions or a message expressly include disclaimers on their websites. paid republication would therefore advocating the election or defeat of a satisfy the content prong of the three- A. Disclaimer Requirements for clearly identified candidate for Federal pronged ‘‘coordinated communication’’ Websites office. Id. test. For example, if a candidate pays to Although the disclaimer rule was not place a banner advertisement on the B. No Disclaimer Required for Electronic at issue in Shays, the Commission noted WashingtonPost.com homepage for one Mail Unless Sent by a Political in the NPRM that because a disclaimer week, and then a different person pays Committee is required for a certain class of ‘‘public the WashingtonPost.com for the communication’’ as defined in 11 CFR In the NPRM, the Commission continued display of the same 100.26, the revision to the definition of proposed changing the disclaimer advertisement for an additional week, ‘‘public communication’’ in 11 CFR requirement for e-mail communications. the content prong of the ‘‘coordinated 100.26 would affect the scope of the The Commission noted that it had communication’’ test would be satisfied. disclaimer requirement. The originally promulgated the regulatory The Commission notes, however, that Commission received several comments requirement that disclaimers appear on satisfaction of the content prong does stating that it would be appropriate to large quantities of e-mail communications in an effort to focus on 42 Senator Russ Feingold, ‘‘Blogs Don’t Need Big require disclaimers for certain ‘‘public Government’’ available at http://www.mydd.com/ communications’’ that take place over story/2005/3/10/112323/534 (last visited 3/24/06). the Internet, provided that the definition 43 See Disclaimer Final Rules, 67 FR at 76963.

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‘‘spam’’ e-mail.44 NPRM at 16972. The Commenters also raised concerns other than political committees.45 The Commission also stated that it had about the quantity threshold (ie., ‘‘more Act does not expressly or implicitly become ‘‘concerned that the current than 500’’) for e-mail communications require that disclaimers appear on e- regulation emphasizes the number of e- to trigger the disclaimer requirement. mail communications. Congress used mail communications sent, rather than Although one commenter supported virtually the same language in the focusing on whether an expenditure was maintaining a numerical threshold to disclaimer provisions and in the made that would justify governmental serve as a ‘‘bright line rule,’’ another definition of ‘‘public communication,’’ regulation.’’ Id. In addition, the suggested eliminating the threshold particularly with respect to the phrase Commission was concerned ‘‘that the entirely and requiring disclaimers on e- ‘‘or any other [type/form] of general lack of a definition of the term mail sent to any address that had been public political advertising,’’ and the ‘‘unsolicited’’ could have the effect of purchased for the purpose of engaging Commission has previously concluded discouraging individuals from engaging in ‘‘political spam,’’ regardless of the that the two phrases ‘‘should be in discussion and advocacy that is core number involved. Still others urged the interpreted in a virtually identical political speech protected by the First Commission to replace the quantity manner.’’ See 2 U.S.C. 441d(a) and Amendment and that is virtually cost- threshold with a monetary threshold; 431(22); Disclaimer Final Rules at free.’’ Id. Accordingly, while proposing suggestions for the monetary threshold 76963. As discussed above, the to maintain the requirement that a ranged from $250 to $25,000 in Commission is changing the definition disclaimer appear on more than 500 expenditures for e-mail of ‘‘public communication’’ to reflect substantially similar unsolicited e-mail communications. the Commission’s conclusion that the only form of ‘‘public communication’’ communications, the Commission Several commenters voiced concerns proposed defining the term ‘‘unsolicited on the Internet is advertising that about implementing the Commission’s appears for a fee on another person’s e-mail’’ as e-mail ‘‘sent to electronic proposal. One commenter, for example, mail addresses purchased from a third Web site. See Part III, above. raised the issue of whether disclaimers A political committee, however, must party.’’ Id. would be permanently required for any The commenters had mixed reactions continue to include a disclaimer e-mail communication sent to addresses whenever it sends more than 500 to the Commission’s proposal. Although originally acquired through a they generally supported limiting the substantially similar e-mail commercial transaction. Noting that his communications. As noted above, disclaimer requirement for e-mail and other organizations often rented communications to e-mail Congress requires disclaimers on a lists of e-mail addresses, the commenter broader class of communications for communications sent to a purchased or asked, ‘‘Does that mean that four rented list, many commenters raised political committee than for all other months down the line, when we’ve been persons. Since 2002, the Commission concerns about the proposed definition having ongoing communication [with a of ‘‘unsolicited e-mail.’’ One commenter has required disclaimers for person whose e-mail address was on the ‘‘unsolicited electronic mail of more asserted that the proposed definition rented list,] that because we rented the would be confusing, because it differed than 500 substantially similar list originally, and the name was communications.’’ 11 CFR 110.11(a). from the commonly accepted meaning produced through a rented list[,] that of the term ‘‘unsolicited e-mail,’’ which The Commission notes that political * * * we have to put a disclaimer on committees have generally complied is not limited to e-mail communications e-mail to [that person]?’’ The commenter sent to addresses purchased from a third with this requirement, and that the also noted that the proposed rule could inclusion of a disclaimer statement party. A second commenter felt that the raise recordkeeping issues for poses only a minimal burden for proposed definition was too narrow, organizations that obtain e-mail political committees. Also, the and urged the Commission to expand it addresses through a combination of Commission is not aware of significant to include communications sent to an e- purchase or rental and other means. concerns that might warrant the removal mail list provided by a candidate or of this requirement for political political committee, regardless of Commenters also raised concerns committees at this time. However, in whether the list was provided as part of about enforcing the disclaimer light of confusion that many a commercial transaction. A third requirement on e-mail, particularly commenters expressed regarding the commenter felt that the proposed given the high volume of e-mail traffic meaning of ‘‘unsolicited e-mail,’’ the definition was too broad, and urged the and the low cost of sending large Commission is removing the Commission not to require disclaimers numbers of e-mail communications. In requirement that e-mail be on e-mail involving less than some addition, some commenters questioned ‘‘unsolicited.’’ minimum cost. A fourth commenter felt the Commission’s rationale for requiring The Commission notes that e-mail that the Commission should not attempt individuals to place disclaimers on communications by corporations and to regulate unsolicited e-mail at all, unsolicited e-mail communications labor organizations are otherwise because of the lack of evidence that containing express advocacy or regulated by 11 CFR Part 114. See 2 political e-mail was ‘‘a tool of big soliciting contributions, but not to U.S.C. 441b and 11 CFR 114.4. money’’ or otherwise harmful, while a require disclaimers on Internet blogs Generally, these entities are prohibited fifth commenter urged the Commission containing the same message. Several from sending e-mail in connection with to require disclaimers on all e-mail sent commenters suggested that the Federal elections outside their restricted by any candidate, political party Commission simply eliminate the class. 2 U.S.C. 441b and 11 CFR 114.4. committee, political committee, or third disclaimer requirement for e-mail party who ‘‘paid to send electioneering communications. C. Technical Reorganization e-mail.’’ The Commission agrees with some of The Commission is making two other the concerns expressed by the changes to 11 CFR 110.11(a) for 44 ‘‘Spam’’ is a common term for ‘‘bulk e-mail sent commenters and has decided to change purposes of clarity. First, the out over the Internet. These messages are often 11 CFR 110.11(a) by eliminating the unsolicited and unwanted by the recipient.’’ Commission is deleting the first Modern Dictionary for the Legal Profession, 866 requirement that disclaimers appear on (3rd ed. 2001). e-mail communications by persons 45 See note 22 for the definition of ‘‘person.’’

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sentence from paragraph (a). Second, communication’’ by a political whether it would be feasible to ascertain the remaining sentence in that committee. the costs of the communications to paragraph is being revised to provide which the allocation rules would apply. VII. Other Uses of the Term ‘‘Public that disclaimers are required only on: Because the revised definition of Communication’’ in the Commission’s (1) A ‘‘public communication,’’ as ‘‘public communication’’ covers only Regulations defined in 11 CFR 100.26, made by a paid Internet advertising placed on political committee; (2) electronic mail The term ‘‘public communication’’ is another person’s website, and of more than 500 substantially similar also used in 11 CFR 106.6(b) and (f) application of the section 106.6 communications when sent by a (allocation of expenses between Federal allocation rules to these political committee; (3) a political and non-Federal activities by SSFs and communications will be based on committee website available to the nonconnected committees) and 11 CFR readily determinable costs, the general public; and (4) a ‘‘public 300.2(b)(4) (definition of ‘‘agent’’ for commenters’ concerns are resolved by communication,’’ as defined in 11 CFR non-Federal candidates). Thus, the the new definition in 11 CFR 100.26. 100.26, made by any person that revisions to the definition of ‘‘public The cost of Internet advertising contains express advocacy, solicits a communication’’ in amended 11 CFR included within the revised definition contribution, or qualifies as an 100.26 affect the application of these of ‘‘public communication’’ will be as ‘‘electioneering communication’’ under two regulations. discrete and readily identifiable as the 11 CFR 100.29. A. 11 CFR 106.6—Allocation of costs of other ‘‘public communications,’’ and application of the section 106.6 D. Bloggers Paid by Candidates Expenses Between Federal and Non- Federal Activities by Separate allocation rules to these Internet The Commission invited comments Segregated Funds and Nonconnected communications will therefore not be on whether it should revise the Political Committees any more complex than for other forms disclaimer rule in 11 CFR 110.11(a) to of communication covered in the require bloggers to disclose payments In 2004, the Commission revised its definition of ‘‘public communication.’’ from a candidate, a political party, or a allocation regulations at 11 CFR 106.6 Moreover, the costs of paid Internet political committee. The Commission governing the source of funds for certain advertising must be allocated under 11 did not propose any change because ‘‘public communications’’ by SSFs and CFR 106.6 only if the SSF’s or current Commission rules at 11 CFR nonconnected committees. Whenever nonconnected committee’s advertising 110.11(a) already require a political either of these entities pays for a ‘‘public refers to a political party or a clearly committee to disclose this type of communication’’ that (1) refers to a identified Federal candidate. disbursement on its publicly available political party, but does not refer to any Therefore, the Commission is not reports filed with the Commission. clearly identified Federal or non-Federal amending the language of the allocation NPRM at 16973. candidate, or (2) refers to one or more rules in 11 CFR 106.6. All SSFs and All but one of the comments received clearly identified Federal candidates, nonconnected committees must on this subject supported the the SSF or nonconnected committee continue to use Federal funds to pay for Commission’s proposed approach that must pay for the communication all covered forms of ‘‘public would not require bloggers to disclose entirely with Federal funds or by communication,’’ which now also payments received from candidates. allocating such expenses between its includes paid Internet advertising Typical of the reaction was this Federal and non-Federal accounts in placed on another person’s website. comment: ‘‘The ethics of taking money accordance with 11 CFR 106.6(b) and to express opinions without disclosing (f). See Political Committee Status Final B. 11 CFR 300.2(b)(4)—Definition of an those payments can certainly be Rules. Because all Internet ‘‘Agent’’ of State and Local Candidates questioned. But for purposes of the communications were exempted from BCRA prohibits candidates for State election laws, * * * no disclaimer the definition of ‘‘public and local offices, and their agents, from should be required. Payments by communication,’’ SSFs and using non-Federal funds to pay for any campaigns are disclosed by campaigns. nonconnected committees were not ‘‘public communication’’ that PASOs a To require more of bloggers when others required to comply with the new candidate for Federal office. See 2 who receive payments from campaigns provisions in 11 CFR 106.6 when U.S.C. 441i(f). Under the Commission’s are not subject to similar disclosure funding Internet communications. regulations, an ‘‘agent’’ of a candidate requirements would not be fair.’’ In the NPRM, the Commission noted for State or local office is a person who The Commission agrees that the Act that the effect of the proposed revisions has actual authority conferred by that does not require a disclaimer when a to the definition of ‘‘public candidate to ‘‘spend funds for a public blogger or other person accepts payment communication’’ in 11 CFR 100.26 communication,’’ as defined in 11 CFR from a Federal candidate. Accordingly, would be to apply the allocation rules 100.26. 11 CFR 300.2(b)(4). it is not changing the disclaimer rule to in 11 CFR 106.6(b)(1), (b)(2), and (f) to In the NPRM, the Commission sought require bloggers to disclose payments those Internet communications covered comment on whether further revisions from a candidate, a political party by the revised definition of ‘‘public to the definition of ‘‘public committee, or other political committee. communication.’’ Thus, SSFs and communication’’ are necessary to Please note, however, that nonconnected committees would be address its potential effect on the disbursements for particular required to use Federal funds to pay for definition of ‘‘agent’’ in 11 CFR communications, as opposed to more certain ‘‘public communications’’ over 300.2(b)(4). Specifically, the generalized payments to bloggers for the Internet. The Commission invited Commission noted that as a result of the consulting or other services, might still comment on this result. proposed change to the definition of require disclaimers. For example, if a The Commission received two ‘‘public communication,’’ a person candidate or political committee pays a comments addressing this issue. Both would be an agent of a State or local fee to place an advertisement on the urged the Commission not to apply the candidate if he or she is authorized by website of a blogger, the advertisement allocation rules in section 106.6 to that candidate to pay for any Internet would require a disclaimer because it communications over the Internet. Both communication that is included within would be a disbursement for a ‘‘public comments expressed concern about the revised definition of ‘‘public

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communication.’’ The Commission to use the Internet as a generally free or expressly remove Internet activity by an received no comments on this issue. low-cost means of civic engagement and individual or group of individuals from The Commission believes that no political advocacy. See NPRM at 16975– the definitions of ‘‘contribution’’ and further revisions to the definition of 76. Specifically, the Commission ‘‘expenditure’’ when the individual or ‘‘agent’’ in 11 CFR 300.2(b)(4) are proposed two sections, 11 CFR 100.94 group of individuals perform necessary to address the effect of the and 100.155, to exempt from the uncompensated Internet activities for revised definition of ‘‘public definitions of ‘‘contribution’’ and the purpose of influencing a Federal communication’’ in 11 CFR 100.26. The ‘‘expenditure’’ the value of election. definition of ‘‘agent’’ was based on the uncompensated Internet activity by A. 11 CFR 100.94(a) and 100.155(a)— anticipated scope of a principal’s volunteers. activities. Now that the principal (i.e., a All of the numerous commenters Exception for Uncompensated Internet State or local candidate) is subject to addressing this issue supported the Activity certain restrictions when making one Commission’s proposal and favored a Although the final versions of 11 CFR type of Internet communication, it broad exemption from regulation for 100.94 and 100.155 are structured follows that a corresponding change to uncompensated Internet activity by somewhat differently from the rules the scope of the agent’s anticipated individuals. The commenters affirmed proposed in the NPRM, they have the activities is consistent with the original that individuals currently use the same scope and application. Thus, purpose of the definition of ‘‘agent.’’ Internet to engage in both individual under these final rules, any individual Therefore, a person will continue to be and collective grassroots political or group of individuals who, without an agent of a State or local candidate if activity. As one commenter stated, compensation, uses Internet equipment he or she has actual authority to pay for ‘‘[t]he Internet provides individuals and services for the purpose of a ‘‘public communication’’ on behalf of with the ability to engage in widely influencing a Federal election does not the candidate, which now includes paid disseminative political discourse make a contribution or expenditure and Internet advertising placed on another without requiring the expenditure of does not incur any reporting person’s website. large sums of money.’’ Another responsibilities as a result of that commenter stated that campaigns in the activity. VIII. 11 CFR 100.94 and 100.155— 2004 election cycle ‘‘relied to an Exceptions to the Definitions of 1. Exception Not Restricted to unprecedented degree on using the ‘‘Contribution’’ and ‘‘Expenditure’’ for Volunteers Known to a Campaign Internet as an organizing tool, both Internet Activity by Individuals financially as well as [for] an In the NPRM, the Commission sought The Act and Commission regulations unprecedented number of volunteers comment on whether the final rules currently exempt certain activities by who came to the campaign through the should apply to all individual Internet individuals from the definitions of Internet.’’ This commenter noted that activities, regardless of whether such ‘‘contribution’’ and ‘‘expenditure.’’ See ‘‘[p]eople who volunteered through the activities are known to a candidate, 2 U.S.C. 431(8)(B)(i) and (ii); 11 CFR Internet * * * were volunteering not authorized committee, or political party 100.74–100.76 and 100.135–100.136. because they thought they were going to committee. The Commission proposed For example, ‘‘the value of services get some job in the administration, not regulations that would apply regardless provided without compensation by any because they wanted to be close to the of whether the individual’s Internet individual who volunteers on behalf of center of action * * * [but] because activities were known to any of these a candidate or political committee’’ is they wanted to make a difference.’’ A groups. All commenters addressing this not a ‘‘contribution’’ to the candidate or different commenter suggested that issue supported the Commission’s political committee. 2 U.S.C. ‘‘[i]ndividual Americans should be able proposal. As one commenter stated, 431(8)(B)(i); 11 CFR 100.74. Similarly, to engage in election related political ‘‘[f]or the sake of clarity, the rule should ‘‘the use of real or personal property, speech online and spend reasonable apply to all ‘individuals,’ whether or not including a church or community room sums of their own money to support they are ‘volunteers’ for a campaign that used on a regular basis by members of that speech, without having to disclose are ‘known’ to the campaign, or a community for noncommercial their identity, worrying about whether employees of a campaign.’’ purposes, * * * voluntarily provided they are violating campaign finance The Act does not require that a by an individual to any candidate or any laws, or having to hire a lawyer to candidate or political committee political committee of a political party advise them.’’ formally recognize an individual as a in rendering voluntary personal services One commenter summarized the ‘‘volunteer’’ for that individual’s on the individual’s residential premises general benefit to be derived from the activities to be exempt from the or in the church or community room for proposed exceptions: ‘‘[a]doption of this definitions of ‘‘contribution’’ and candidate-related or political party- rule would in itself address the vast ‘‘expenditure.’’ On the contrary, the related activities’’ is not a majority of concerns and objections that plain language of the Act uses the term ‘‘contribution’’ or ‘‘expenditure.’’ 2 have been expressed about this ‘‘volunteer’’ as relating to the provision U.S.C. 431(8)(B)(ii). See also 11 CFR rulemaking. This rule would make clear, of voluntary and uncompensated 100.35, 100.36, 100.75, and 100.76. appropriately so, that individuals services, rather than to the formal status The Internet has changed the way in engaging in unfettered political of the actor in relation to a campaign. which individuals engage in political discourse over the Internet using their See 2 U.S.C. 431(8)(B)(i) (exempting activity by expanding the opportunities own computer facilities (or those from the definition of ‘‘contribution’’ for them to participate in campaigns and publicly available) would not be subject ‘‘the value of services provided without grassroots activities at little or no cost to regulation under the campaign compensation by an individual who and from remote locations. Accordingly, finance laws, whether or not such volunteers’’) and 2 U.S.C. 431(8)(B)(ii) in the NPRM, the Commission proposed activities are coordinated with a (exempting from the definition of new rules to extend explicitly the candidate.’’ ‘‘contribution’’ ‘‘the use of real or existing individual activity exceptions After considering all the comments, personal property * * * voluntarily to the Internet to remove any potential the Commission is adding new 11 CFR provided by an individual to any restrictions on the ability of individuals 100.94 and 100.155, which together candidate or any political committee of

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a political party in rendering voluntary 2. Republication provides that ‘‘the value of services personal services’’). Moreover, one In the NPRM, the Commission noted provided without compensation by any commenter pointed out that, in light of that its proposed regulations would individual who volunteers on behalf of the new opportunities to engage in protect an individual or volunteer who a candidate or political committee’’ is political activity through the Internet, produces or maintains a website or blog, not a ‘‘contribution’’ to the candidate or ‘‘it would be an odd result if a campaign or conducts other grassroots activity on political committee. 2 U.S.C. volunteer was exempt but someone the Internet. The NPRM noted that this 431(8)(B)(i). See also 11 CFR 100.74. acting independently was not.’’ activity would not result in individuals Consistent with these provisions, the The Commission agrees. Therefore, or volunteers making a contribution or narrative accompanying the exceptions the new rules exempt Internet activity expenditure and they would not incur proposed in the NPRM made clear that by individuals acting both with and any reporting responsibilities. For the value of an individual’s without the knowledge or consent of a example, if an individual downloaded uncompensated Internet services would candidate, authorized committee, or materials from a candidate or party be excepted from the definitions of political party committee. The new website, such as campaign packets, yard ‘‘contribution’’ and ‘‘expenditure.’’ See rules use the phrase ‘‘acting signs, or any other items, the NPRM at 16976. Accordingly, under independently’’ to cover any individual downloading of such items would not new 11 CFR 100.94 and 100.155, the who is unknown to, or acting without constitute republication of campaign value of an individual’s uncompensated the consent of, a candidate, authorized materials. time and the value of any special skills committee, or political party, and the Even if this activity is done in that individuals may bring to bear on phrase ‘‘in coordination with’’ to cover cooperation, consultation, or concert their Internet activities are exempt from any individual who is a formal or with a candidate or a political party the definitions of ‘‘contribution’’ and informal volunteer known to, and acting committee, no contribution or ‘‘expenditure.’’ with the consent of, a candidate, expenditure would result, and neither 4. Individual Services Must Be authorized committee or political party the candidate nor the political party Uncompensated committee.46 committee would incur reporting Finally, commenters raised concerns responsibilities. Additionally, if an The Commission sought comments, that the new rules would not apply to individual forwarded an e-mail received but received none, on whether an groups of individuals who act from a political committee, the exception for individual Internet collectively. One commenter pointed forwarding of that e-mail would not activity should be extended to out that, ‘‘While it is true that any constitute republication of campaign individuals who receive some form of ‘group’ comprises individuals, the plain materials or be an in-kind contribution. payment for their Internet services from reading of the [proposed] rule suggests The Commission has chosen to adopt a candidate or a political committee. that only individuals acting such an approach in the final rules. In The Commission notes that the Act and ‘individually’ are protected from doing so, the Commission recognizes Commission regulations exempt only regulation of ‘contributions’ or the importance of grassroots activity and ‘‘services provided without ‘expenditure.’’’ the role of the Internet. Under the final compensation’’ from the definitions of In response to this concern, the rules at 11 CFR 100.94 and 100.155, ‘‘contribution.’’ 2 U.S.C. 431(8)(B)(i); 11 Commission in the final rules uses the individuals are free to republish CFR 100.74 (emphasis added). Likewise, terms ‘‘individual or group of materials using the Internet without the proposed rule limited the new individuals.’’ Individuals are eligible for making a contribution or expenditure. exceptions to uncompensated services. Accordingly, these final rules exempt the exceptions whenever they engage in However, the Commission notes that 11 only those Internet services for which Internet activities for the purpose of CFR 100.94(e) would not exempt from an individual does not receive any influencing a Federal election alone or the definition of ‘‘contribution’’ any compensation. Campaign employees, for collectively as a group of individuals. ‘‘public communication’’ that arises as example, are not eligible for the For example, if several individuals the result of the republication of such exceptions in 11 CFR 100.94 and share the responsibilities of operating a materials. For example, if an individual 100.155 for activities for which they are blog or other website, then each downloaded a campaign poster from the compensated. However, campaign individual would be covered under new Internet and then paid to have the employees are still within this 11 CFR 100.94 and 100.155. The poster appear as an advertisement in the exemption when they engage in Commission also notes that a group of New York Times, the advertisement in uncompensated Internet activities. individuals will not trigger political the New York Times would not be Moreover, bloggers would not lose committee status through Internet within the exemption of the final rules. eligibility for the exceptions by selling activities covered by the new exceptions 3. Personal Services Exempted advertising space to defray the operating because those Internet activities would As was noted above, the Act and costs of the blog, but would not be not constitute contributions or eligible for the exceptions for campaign 47 Commission regulations exempt certain expenditures under the Act. work for which the blogger is activities by individuals from the compensated by a campaign committee 46 In Advisory Opinion 1999–17 (George W. Bush definitions of ‘‘contribution’’ and or any other political committee. For for President Exploratory Committee), the ‘‘expenditure.’’ See 2 U.S.C. 431(8)(B)(i) example, if a political committee pays a Commission concluded that a campaign’s and (ii); 11 CFR 100.74–100.76 and permission ‘‘at some level’’ was essential for the blogger to write a message and post it 100.135–100.136. For example, the Act volunteer exception to apply to an individual’s within his or her blog entry, the Internet activity on behalf of a presidential candidate. Advisory Opinion 1999–17 is aggregating in excess of $1,000 or which makes resulting blog entry would not be superseded to the extent that it indicates that the expenditures aggregating in excess of $1,000 during exempted as ‘‘uncompensated Internet campaign or political committee must be aware of a calendar year’’). As discussed below, payments to activity.’’ While not exempted under the or sanction the individual’s Internet activities in place advertisements on another person’s website, final rules, such a payment to the order for the individual’s activity to be exempt. other than for a nominal fee, are not exempt under 47 See 11 CFR 100.5 (‘‘Political committee means the new exceptions for Internet activities by blogger would not otherwise restrict the * * * any committee, club, association, or other individuals, and such payments could result in blogger’s activities or create an group of persons which receives contributions expenditures or contributions. obligation on the part of the blogger to

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report the payment. The expenditure by interpreted to exempt an individual’s technology that has not yet been the political committee is akin to a Internet activity if the individual used a developed. Furthermore, the new rules vendor payment, which the political neighbor’s computer in the individual’s cover ‘‘podcasting’’ and any other form committee must report to the own home or in an Internet cafe´, but not of Internet communication that is, or Commission. Similarly, if a campaign if the individual uses a neighbor’s might be, used for political activity. The pays a blogger for technical consulting computer in the neighbor’s home. Commission notes that the new services regarding the campaign’s Additionally, the proposed rules may definition of ‘‘Internet activities’’ website, the blogger’s activities on his or have been interpreted to exempt an contains an illustrative, rather than an her own blog would remain eligible for individual’s Internet activities exhaustive, list of the activities that are the exceptions in 11 CFR 100.94 and performed at the individual’s residence covered. 100.155. using a computer supplied by the C. 11 CFR 100.94(c) and 100.155(c)— If a campaign committee or other individual’s employer, but not if the Definition of ‘‘Equipment and Services’’ political committee reimburses an Internet activities were performed by individual for any out-of-pocket costs the individual at his or her own place The proposed rules focused on that the individual may incur in of work. exempting an individual’s use of performing Internet activities, such As this result was not the ‘‘computer equipment and services’’ for reimbursements do not constitute Commission’s intent, the final rules do activities on the Internet and listed compensation under the final rules. not distinguish between sources of examples of the types of computer Accordingly, individuals may be computer equipment nor locations equipment and services covered by the reimbursed by political committees for where the Internet activities are proposed rules. Specifically, paragraphs any out-of-pocket expenses they incur performed. Under new 11 CFR 100.94 (c) of both proposed 11 CFR 100.94 and in performing Internet activities and and 100.155, an individual does not 100.155 stated that ‘‘computer remain within the exemptions in 11 make a contribution or expenditure equipment and services’’ includes, but CFR 100.94 and 100.155. If a political when using equipment or services for is not limited to, computers, software, committee pays the costs of setting up uncompensated Internet activities for Internet domain names, and Internet a website or controls the overall content, the purpose of influencing a Federal Service Providers (ISP). however, the website may need to carry election, regardless of who owns such The Commission has adopted the an appropriate disclaimer under 11 CFR equipment or where the equipment is language in the NPRM defining 110.11(a)(1). located. The final rules thus avoid ‘‘equipment and services’’ as including, disparate treatment of individuals or but not limited to, computers, software, 5. Individual Internet Activity is Exempt volunteers who may not be able to Internet domain names, and Internet Regardless of Who Owns the Computer afford the purchase or maintenance of Service Providers (ISP). In response to Equipment and Where the Internet their own computers and websites and concerns that the proposed language Activities Are Performed explicitly protect individuals who may was technology specific, the The proposed rules in the NPRM borrow a computer from a friend, Commission has added the phrase ‘‘and covered three situations involving the neighbor, family member, or anyone any other technology that is used to use of computer equipment and services else to engage in political activity. provide access to or use of the Internet,’’ by an individual for uncompensated to ensure that future innovations in Internet activities: (1) The use of B. 11 CFR 100.94(b) and 100.155(b)— Definition of ‘‘Internet Activities’’ computer equipment and services will computer equipment and services that be included within the final rules. New the individual owns; (2) the use of In the rule proposed in the NPRM, the sections 100.94 and 100.155 include, computer equipment and services Commission defined the term ‘‘Internet but are not limited to, computers, available at a public facility; and (3) the activities’’ to include ‘‘e-mailing, handheld communication devices that use of computer equipment and services including forwarding; linking, including provide access to the Internet, software, on the individual’s residential premises. providing a link or hyperlink to a routers, servers, Internet access Some commenters opposed this candidate’s, authorized committee’s or purchased from an ISP, subscription proposed structure as ‘‘overly lengthy party committee’s website; distributing fees, blog hosting services, bandwidth, and complicated in part because the banner messages; blogging; and hosting licensed graphics, domain name proposed rule tries to predict how and an Internet site.’’ NPRM at 16978. services, and e-mail services.49 where individuals will be using The final rules encompass all of the computers.’’ Some of these commenters same activity covered by proposed 11 49 In Advisory Opinion 1998–22 (Leo Smith), the also complained that distinguishing CFR 100.94 and 100.155, but also Commission concluded that even if an individual between sources of equipment include the phrase ‘‘and any other form acting independently incurs no additional costs in unnecessarily complicated the proposed of communication distributed over the creating a website that expressly advocates the election or defeat of a clearly identified candidate, rules. ‘‘These individuals and Internet.’’ The Commission added the at least some portion of the underlying costs of volunteers should use whatever phrase ‘‘and any other form of creating and maintaining that website is an computer is normally available to and communication distributed over the expenditure under the Act and must be reported if used by them,’’ stated one commenter. Internet’’ to ensure that future advances it exceeds $250 in a calendar year. Later, in Advisory Opinion 1999–17 (George W. Bush for This commenter also stated that ‘‘[t]he in technology will be encompassed President Exploratory Committee), the Commission question is not which computer is used, within the final rules. For example, the concluded that in the course of developing a but whether it is used in the course of new rules not only cover such things as website for a campaign, an individual could use uncompensated individual and sending or forwarding electronic ‘‘his or her personal property at home, i.e., a home computer’’ and incur ‘‘related costs (such as volunteer activity.’’ messages; providing a link or other maintaining Internet service with a provider) that The Commission agrees. direct access to any person’s 48 Internet are part of the upkeep’’ of the website without Distinguishing between sources of site; posting banner messages; and making a contribution or expenditure, and without computer equipment and locations blogging, creating, maintaining, or incurring any reporting obligations. Advisory Opinion 1998–22 is superseded to the extent that where the Internet activities occur could hosting an Internet site; but also cover it treated as an ‘‘expenditure’’ an individual’s use lead to anomalous results. For instance, of computer equipment and services for the proposed rules may have been 48 See note 22 for the definition of ‘‘person.’’ uncompensated Internet activity.

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The Commission notes that while entities at all. See 2 U.S.C. 431(9)(B)(i) activities. Such corporations could be individuals incur no liability for using and 11 CFR 100.73. treated as individuals for purposes of equipment and services in the course of The purposes of the Act would not be the campaign finance rules applicable to their uncompensated political activity, furthered by prohibiting individuals’ Internet activity.’’ Internet activities simply because an this rule change does not exempt all The Commission believes that the best individual incorporates for liability or political activity involving the use of approach to creating an exception tax reasons. The Supreme Court has technology from regulation. Therefore, tailored to individuals engaged in stated that the Act’s prohibitions on for example, a political committee’s Internet activity who choose to corporate expenditures and purchase of computers for individuals incorporate, including bloggers, is to to engage in Internet activities for the contributions arise from ‘‘Congress’s concern that organizations that amass focus on the activities of the resulting purpose of influencing a Federal corporation, rather than delving into the election, remains an ‘‘expenditure’’ by great wealth in the economic marketplace not gain unfair advantage reasons for incorporation. The result of the political committee. Additionally, a such an approach is that an individual corporation would make a prohibited in the political marketplace.’’ FEC v. Massachusetts Citizens for Life, 479 U.S. who engages in Internet activity after in-kind ‘‘contribution’’ and a prohibited incorporating is treated the same under ‘‘expenditure’’ by providing software 238, 263 (1986). The Court the new exceptions as an and Internet access for the specific acknowledged, however, that ‘‘[s]ome unincorporated individual who engages purpose of enabling its employees to corporations have features more akin to in similar Internet activity. influence a Federal election through voluntary political associations than political Internet activities. See 2 U.S.C. business firms, and therefore should not Accordingly, new 11 CFR 100.94(d) 441b(a); 11 CFR 114.2. See also have to bear burdens * * * solely and 100.155(d) provide that the discussion of 11 CFR 114.9, below. because of their incorporated status.’’ Id. exceptions in sections 11 CFR 100.94(a) The Commission concludes that a and 100.155(a) apply to a corporation D. 11 CFR 100.94(d) and 100.155(d)— corporation whose purpose and that meets three criteria: (1) It is wholly Exceptions Applicable to Incorporated function is to permit an individual to owned by one or more individuals; (2) Bloggers and Similar Corporations engage in Internet activity is more akin it engages primarily in Internet Corporations and labor organizations to a political association than to a activities; and (3) it does not derive a are generally prohibited from making business firm formed to amass wealth, substantial portion of its revenues from ‘‘contributions’’ or ‘‘expenditures’’ in and thus should not be subject to the sources other than income from its connection with any Federal election. 2 burdens of the prohibitions on corporate Internet activities. The Commission U.S.C. 441b. In the NPRM, the contributions and expenditures. Thus, recognizes that incorporated bloggers Commission sought comment on the application of the new exceptions in and other similarly incorporated whether bloggers, acting as incorporated sections 100.94 and 100.155 to individuals often generate revenue or unincorporated entities, should still individuals who choose to incorporate primarily through the sale of advertising be eligible for the exceptions to the for these specific purposes only avoids space on their own websites or through definitions of ‘‘contribution’’ and penalizing individuals for using the other Internet activities, such as ‘‘expenditure.’’ NPRM at 16975. corporate form merely to limit their providing subscription and membership personal liability. services, and may also generate All commenters who addressed this Although all commenters who ancillary revenue from non-advertising topic supported exempting Internet discussed this issue agreed that Internet sources, such as T-shirts, mugs, and activity by incorporated bloggers from activity by individuals who choose to the definitions of ‘‘contribution’’ and incorporate should be treated the same similar merchandise. The third ‘‘expenditure.’’ Some commenters as Internet activity by unincorporated requirement is therefore added to observed that bloggers often incorporate individuals, the commenters disagreed preserve the exception for such mainly for tax reasons or to limit their on the scope of such treatment. Some incorporated bloggers and similar liability for the operation of their blogs. commenters noted that the Commission corporations, without creating an overly ‘‘Every month now, somebody threatens permits political committees to broad exception to the definitions of to sue me,’’ stated one blogger who incorporate ‘‘for liability purposes ‘‘contribution’’ and ‘‘expenditure’’ that indicated that the popularity of his only,’’ see 11 CFR 114.12, and would encompass the activities of any website and the nature of the political recommended that the exceptions for corporation engaged in online activities opinions he expresses on his blog made Internet activities by individuals only merely as a platform for other it necessary for him to incorporate for apply to bloggers who incorporate for commercial activities. See, e.g., his own legal protection. liability purposes. However, several Advisory Opinion 2004–19 The Commission agrees that other commenters asked the (DollarVote.org) (concerning a for-profit providing an exception that applies to Commission to focus on the activities of corporation that provided commercial all individuals, whether incorporated or the resulting corporation and their services to both citizens and candidates unincorporated, is the best approach. relation to the Internet activities that are via DollarVote.org website). The Therefore, individuals who choose to the subject of the exceptions. exceptions in 11 CFR 100.94(d) and incorporate are also eligible for the new Specifically, one commenter 100.155(d) are not limited to blogging exceptions in 11 CFR 100.94 and recommended ‘‘permit[ting] the activities or any other particular Internet 100.155 for Internet activities by incorporation of small online-only activity. Rather, the language in new individuals. Although the activities of speakers in cases where the business of sections 100.94(d) and 100.155(d) some incorporated bloggers may also be the corporation consists of the operation ensures that the Internet activities of exempt under the media exemption of a blog or other forum for online individuals who choose to incorporate (discussed below), the separate discourse.’’ Other commenters are exempt from regulation as exceptions for individual activity may advocated ‘‘an exempt category of ‘‘contributions’’ or ‘‘expenditures,’’ reach some incorporated entities that ‘blogger corporation’ [defined] as an regardless of whether the individual are not acting within the scope of the incorporated entity whose principal chooses to ‘‘blog’’ or to engage in any media exemption or that are not press purpose is to conduct blogging other form of Internet activity.

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E. 11 CFR 100.94(e)(1) and Additionally, the exemption recognizes associated with ‘‘any news story, 100.155(e)(1)—Exemption for that because many individuals who use commentary, or editorial distributed Communications Placed for a Nominal the Internet cannot, or do not, maintain through the facilities of any Fee on Another Person’s Website their own websites, or simply wish to broadcasting station, newspaper, In the NPRM, the Commission noted post to a blog in a place where it is more magazine, or other periodical that, consistent with the proposed likely to be seen by others, an publication, unless such facilities are revision to the definition of ‘‘public exemption for any nominal fee to post owned or controlled by any political communication’’ to encompass on another person’s website is party, political committee, or communications placed for a fee on appropriate. Therefore, individuals or candidate.’’ 2 U.S.C. 431(9)(B)(i). This another person’s website, payments for groups of individuals, acting exemption, commonly known as the a ‘‘public communication’’ on the independently or as volunteers, who ‘‘media exemption,’’ recognizes ‘‘the Internet could also be a contribution or post blogs or other content on host sites, unfettered right of the newspapers, would be entitled to the exception just television networks, and other media to expenditure. Therefore, the Commission as if the content were posted on their cover and comment on political proposed excluding payments for own website. campaigns.’’ H.R. Rep. No. 93–1239, 93d placing communications on another Congress, 2d Session at 4 (1974) person’s website from the new F. 11 CFR 100.94(e)(2) and (3) and (emphasis added). The media exceptions for individual Internet 100.155(e)(2) and (3) ‘‘ No Exemption exemption is implemented in sections activity, unless the communications for Payments for E-mail Lists Made at 100.73 and 100.132 of the Commission’s were placed for a nominal fee, in which the Direction of a Political Committee or rules. See 11 CFR 100.73 (media case they would be excepted from the Transferred to a Political Committee exemption for contributions) and definitions of contribution and In the NPRM, the Commission stated 100.132 (media exemption for expenditure. See NPRM at 16976. that it would continue to view the expenditures). The Commission has decided to adopt purchase of mailing lists (including e- In determining whether the media this approach. Accordingly, new mail lists) as expenditures or exemption applies, the Commission has paragraphs 11 CFR 100.94(e)(1) and contributions when the lists are used to traditionally applied a two-step 100.155(e)(1) state that the new rules distribute candidate and political analysis. First, the Commission asks exempt nominal payments for a ‘‘public committee communications for the whether the entity engaging in the communication,’’ as defined in 11 CFR purpose of influencing Federal activity is a press entity as described by 100.26, from the definitions of elections. See NPRM at 16976. Paying the Act and Commission regulations. ‘‘contribution’’ and ‘‘expenditure.’’ The for an e-mail list is often expensive, Second, in determining the scope of the Commission notes, however, that a whereas distributing the e-mail exemption, the Commission considers: payment for a ‘‘public communication’’ communications is usually free or at (1) Whether the press entity is owned or would not necessarily result in a negligible cost. The Commission is controlled by a political party, political contribution or expenditure just because concerned, however, that the new committee, or candidate; and (2) it is not exempted by one of the new exceptions for individual Internet whether the press entity is acting as a exceptions; only those payments made activities might be construed to permit press entity in conducting the activity at for the purpose of influencing a Federal individuals to pay for e-mail lists that issue (i.e., whether the entity is acting election or ‘‘in connection with’’ a might then be transferred to, or used by, in its ‘‘legitimate press function’’).50 Federal election would result in a a political committee without any In the NPRM, the Commission contribution or expenditure. See 2 contribution or expenditure resulting. proposed changing its rules to clarify U.S.C. 431(8) and (9), 441b; 11 CFR Therefore, new 11 CFR 100.94(e)(2) and that the protections in the Act for news 100.52(a), 100.111(a) and 114.2(a). 100.155(e)(2) provide that the stories, commentary, and editorials The allowance for the payment of a exemption for individual Internet appearing in traditional media also nominal fee in connection with activities does not apply to any payment apply to news stories, commentary, and uncompensated campaign activity on for the purchase or rental of an e-mail editorials appearing on the Internet. the Internet is consistent with the rules address list when that payment is made Specifically, the Commission proposed as proposed in the NPRM and the at the direction of a political committee. revising 11 CFR 100.73 and 100.132 to existing volunteer exception that allows Similarly, new 11 CFR 100.94(e)(3) and indicate that news stories, for payment of a nominal fee in 100.155(e)(3) provide that the commentaries, and editorials that connection with an individual’s use of exemption for individual Internet otherwise would be entitled to the real property. See 11 CFR 100.75 activities does not apply to payments for media exemption are likewise exempt (permitting payment of a nominal fee for any e-mail address list that is when they are distributed using the the use of a community room on an subsequently transferred to a political Internet. individual’s residential premises). It committee, whether that transfer is The Commission invited comment recognizes, as one commenter noted, permanent or temporary (i.e., sharing generally on the proposed changes to that ‘‘[t]he Internet has effectively put the list of e-mail addresses for a one- the media exemption. The Commission the power of advertising communication time use). Under the new rule, a also asked a number of specific into the hands of every citizen * * * contribution or expenditure would not [a]ds on blogs, for example, cost as little result when an e-mail list is purchased 50 See Reader’s Digest Association v. FEC, 509 F. as $10 per week, and ads on search by an individual unless either of the Supp. 1210, 1215 (S.D.N.Y. 1981); FEC v. Phillips engines such as Google can cost just 10 Publishing, 517 F. Supp. 1308, 1312–1313 (D.D.C. conditions in paragraphs (e)(2) or (e)(3) 1981); Advisory Opinions 2005–16 (Fired Up! LLC), cents per click.’’ While the commenter’s of 11 CFR 100.94 and 100.155 are met. 2004–07 (MTV, MTV Networks, Viacom, Inc. and remarks describe the low cost of some Viacom Internation, Inc.), 2000–13 (Ampex individual Internet advertisements, the IX. 11 CFR 100.73 and 100.132— Corporation and iNEXTV Corporation), 1998–17 Commission notes the aggregate cost of Exception for News Story, Commentary, (Daniels Cablevision), 1996–48 (National Cable or Editorial by the Media Satellite Corporation), 1996–41 (A.H. Belo a communication, rather than the cost Corporation), 1996–16 (Bloomberg, L.P.) and 1982– on a per click or per view basis, In the Act, Congress exempted from 44 (Democratic National Committee and Republic determines whether a fee is nominal. the definition of ‘‘expenditure’’ costs National Committee).

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questions, including whether the speaker on a soapbox in the town Commission recognizes that the media proposed changes were consistent with square, and argued that any blogger who exemption is available to media entities or required by the Act; what the publishes ‘‘campaign-related’’ opinions that cover or carry news stories, appropriate breadth of the exemptions should be shielded from regulation commentaries, or editorials solely on should be; and whether the exceptions under the media exemption. One the Internet, as well as to media entities should be limited to entities that also commenter suggested that the that cover or carry news stories, have traditional, non-Internet media Commission exempt all bloggers from commentaries, and editorials solely in operations. financial reporting and coordination traditional media or in both traditional Thirty-seven of the comments filed in requirements, while still requiring them media and on the Internet. response to the NPRM addressed the to disclose on their websites any The application of the media proposed changes to the media payments that they receive from exemption to Internet communications exemption. All but one of these candidates or political committees for is consistent with past instances in commenters supported extending the taking a particular position in which the Commission has extended the exemption to media activities on the connection with a Federal election. media exemption to forms of media that Internet,51 although they differed with Several commenters recommended did not exist or were not widespread respect to the scope of the exemption. against exempting bloggers as a class when Congress enacted the exemption Some commenters, for example, from regulation. One commenter in 1974. For example, in 1996 the suggested that the Commission extend observed that ‘‘crucial questions’’ must Commission changed its rules to make the media exemption to any be answered before any blogger or clear that the media exemption also independent entity that publishes online news source qualifies for the applies to news stories, commentary, material, regardless of the medium used, media exemption, such as whether the and editorials appearing in cable and regardless of whether the entity is entity’s resources are ‘‘devoted to programming.53 The Commission noted a member of the traditional media. collecting and disseminating that, ‘‘in exempting news stories from Others, however, opined that not information to the public’’; whether the the definition of ‘expenditure,’ Congress everything disseminated on the Internet entity ‘‘inform[s] and educate[s] the intended to assure ‘the unfettered right constitutes media activity within the public, offer[s] criticism, and provide[s] of the newspapers, TV networks and meaning of the media exemption, and [a] forum[] for discussion and debate’’; other media to cover and comment on urged the Commission to require and whether the entity ‘‘serve[s] as a political campaigns.’’’54 The entities operating on the Internet to powerful antidote to governmental Commission found that, ‘‘although the satisfy the same criteria as entities power abuses and hold[s] officials cable television industry was much less operating in traditional media in order accountable to the people.’’ Another developed when Congress expressed to qualify for the exemption. All of the commenter urged the Commission to this intent, it is reasonable to conclude commenters who addressed the consider a number of ‘‘relevant factors’’ that cable operators, programmers and question agreed that applying the media in determining whether a blogger producers, when operating in their exemption to the Internet would be qualifies for the media exemption, such capacity as news producers and consistent with the Act, and none of the as whether the blogger receives distributors, would be precisely the type commenters supported limiting the payments from a campaign; whether the of ‘other media’ appropriately included media exemption to entities that also blogger solicits money for candidates; within this exemption.’’55 have traditional, non-Internet media and whether the blogger engages in Similarly, although Congress could operations. newsgathering or editorializing. not have envisioned the Internet when The commenters’ views on regulating The Commission has decided to it created the media exemption more bloggers were more diverse. While all revise 11 CFR 100.73 and 11 CFR than thirty years ago, much less the commenters who addressed this topic 100.132 to clarify that the media revolutionary changes in the area of agreed that the media exemption should exemption applies to media entities that political communication that the extend to at least some bloggers, the cover or carry news stories, Internet has made possible, the commenters differed with respect to commentary, and editorials on the Commission finds it reasonable to whether a blanket exemption should be Internet, just as it applies to media conclude that entities providing news created to cover all bloggers. At one end entities that cover or carry news stories, on the Internet are precisely the type of of the spectrum were those commenters commentary, and editorials in ‘‘other media’’ appropriately included who believed that ‘‘all bloggers, whether traditional media, such as printed within the media exemption. As the big, small, incorporated, or periodicals or television news programs. Supreme Court noted, ‘‘It is not the moonlighting, deserve the media The Commission is also clarifying that intent of Congress in [FECA] * * * to exemption.’’ They opined that online the media exemption protects news limit or burden in any way the First news provided by blogs is as ‘‘vibrant stories, commentaries, and editorials no and vital’’ as any offline publishing; that matter in what medium they are really truly impossible for any one person to grasp blogs satisfy public information needs the scope of Internet communication technologies published. Therefore, the Commission * * * [O]ff the top of my head, I could think of not met by traditional media; that it has added ‘‘website’’ to the list of media * * * blogging, e-mail, instant messaging, message would be impractical for the in the exemption and is also adding boards, Yahoo groups, Internet Relay Chat, chat Commission to ‘‘police’’ bloggers; and ‘‘any Internet or electronic publication’’ groups, podcasting, Internet radio, Flash that it would be ‘‘harmful’’ for the to address publication of news stories, animations, Web video, Webcams, peer-to-peer, and Commission to draw lines between social networking software. Then, there is Grokster, commentaries, or editorials in electronic * * * And the new Apple operating system has individual bloggers. form on the Internet.52 In so doing, the these little applications called widgets * * * and Several commenters explicitly Microsoft promises to do the same. All of these equated bloggers to the proverbial 52 The terms ‘‘website’’ and ‘‘any Internet or technologies have political applications, obviously, elctronic publication’’ are meant to encompass a yet they are vastly different.’’). 53 51 The lone dissenting commenter supported wide range of existing and developing technology, Final Rules on Candidate Debates and News exempting all Internet publications from regulation, such as websites, ‘‘podcasts,’’ etc. See e.g., Stories, 61 FR 18049 (Apr. 24, 1996). but recommended that the Commission craft a Testimony of Markos Moulitas Zuniga, Federal 54 Id. at 18050 (quoting H.R. Rep. No. 93–1239, broad exception independent of the media Election Commission Public Hearing on Internet 93rd Cong., 2d Sess. at 4 (1974)). exemption. Communications at 27–28 (June 28, 2005) (‘‘It is 55 Id.

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Amendment freedoms of the press and and Republican National Conventions committee on cable programming were association. Thus, the exclusion assures over the Internet. In Advisory Opinion protected by the press exemption).56 the unfettered right of newspapers, TV 2000–13 (Ampex Corporation and Moreover, Commissioners have networks, and other media to cover and iNEXTV Corporation), iNEXTV did not repeatedly concluded that the media comment on political campaigns.’’ create programming under its own exemption applies without regard to Massachusetts Citizens for Life, 479 U.S. name, but rather operated its own whether programming is biased or at 250 (citing H.R. Rep. No. 93–129 at network of specialized news and balanced. See MUR 3624 (Walter H. p.4 (1974)). information sites that offered direct Shapiro) (concluding that pro-Bush/ The Commission finds as a matter of access to governmental and business Quayle broadcast by Rush Limbaugh fell law that the media exemption applies to news events, interviews, and within the media exemption even the same extent to entities with only an commentary with political figures, and though the broadcast was arguably online presence as to those with an a forum where viewers could state their biased); Statement of Reasons by offline component as well. The opinions on specific issues via Commissioners Wold, McDonald, Washington Post, New York Times, computer. The Commission concluded Mason, Sandstrom, and Thomas in CNN and other newspapers and that iNEXTV’s activities on the Internet MURs 4929, 5006, 5090 and 5117 (ABC, broadcast news sources maintain an were viewable to the general public and CBS, NBC, New York Times, Los online presence in addition to their were akin to a periodical or news Angeles Times and Washington Post) traditional means of distribution and program. Therefore, iNEXTV’s proposed (‘‘Unbalanced news reporting and dissemination. Salon.com, Slate.com, gavel-to-gavel coverage of the commentary are included in the and Drudgereport.com operate Democratic and Republican National activities protected by the media exclusively online. The Commission Conventions fit into the categories of exemption.’’); Statement of Reasons by concludes that the media exemption news story and commentary that are Commissioners Wold and Mason in applies with full force to all these types exempted from the definition of MUR 4946 (CBS News, Fox Network of entities. ‘‘contribution’’ and ‘‘expenditure’’ News, CNBC News, MSNBC News, CNN The Commission has consistently under the Act. and ABC News) (‘‘politically biased viewed online, Internet-based The Commission has also made clear reporting and commentary remain dissemination of news stories, that the press exemption applies to a within the ‘‘legitimate press commentaries, and editorials to be wide variety of online and offline function.’’’). See also Statement of indistinguishable from offline television activities. In Advisory Opinion 2005– Reasons by Commissioner Weintraub in and radio broadcasts, newspapers, 16, the Commission determined that the MURs 5540, 5545, 5562, and 5570 (CBS, magazines and periodical publications media exemption applied to an entity Kerry/Edwards 2004, Inc. and Sinclair for the purposes of applying the media whose Internet sites were publicly Broadcasting) at 2 (‘‘It is not the role of exemption under the Act. For example, available and carried news stories, the Federal Election Commission to in Advisory Opinion 2004–07, the commentaries, and editorials that determine whether a news story issued Commission determined that the media supported or opposed Federal by a press entity is legitimate, exemption applied to MTV’s posting on candidates—even where the entity was responsible, or verified * * * Whether its website of election-related founded and controlled by a former particular broadcasts were fair, educational materials and the results of Federal officeholder and a former State balanced, or accurate is irrelevant given a survey of people’s preferences for party executive director. The the applicability of the press President of the United States. As the Commission has specifically determined exemption.’’). Commission noted, ‘‘websites are a that the press exemption applies Commissioners have also concluded common feature of many media regardless of whether the news story, that the presence or absence of alleged organizations. The Commission commentary, or editorial contains coordination between a press entity and considers posting news stories, express advocacy. Media entities a candidate or political party is commentaries, and editorials on a press routinely endorse candidates, and the irrelevant to determining whether the entity’s website to be within the entity’s media exemption protects their right to Act’s press exemption applies. See, e.g., legitimate press functions.’’ Advisory do so. See Advisory Opinion 2005–16 Statement of Reasons of Commissioners Opinion 2004–07 (MTV, MTV (Fired Up! LLC) at 6 (noting that ‘‘an Toner, Mason and Smith in MURs 5540 Networks, Viacom, Inc. and Viacom entity otherwise eligible for the press and 5545 (CBS, Kerry/Edwards 2004) International, Inc.). The Commission exception would not lose its eligibility (‘‘Allegations of coordination are of no also concluded that the media * * * even if the news story, import when applying the press exemption would apply to MTV’s commentary, or editorial expressly exemption. What a press entity says in contemporaneous announcement and advocates the election or defeat of a broadcasts, news stories and editorials publication of survey results to the clearly identified candidate for Federal is absolutely protected under the press public via e-mail and text messages. Id. office.’’). exemption, regardless of whether any See also Advisory Opinion 2003–34 The Commission has also concluded (Viacom, Inc., Showtime Networks, Inc., that press entities do not forfeit the 56 There have been recent instances in which and TMD Productions, Inc.) (promotion press exemption if they solicit media entities have solicited contributions for Federal candidates. See e.g., Kerry for Prez: Why by Showtime and Viacom on their contributions for candidates. See Him, Why Now and How to Put Him in the White websites of a television series about a Advisory Opinion 1980–109 (James House, Philadelphia Daily News, June 16, 2004 fictional presidential election that Hansen) (endorsement of a Federal (containing a lead editorial that stated ‘‘[Y]ou can depicted some real Federal candidates candidate and solicitations to the learn more about Kerry, make a donation or volunteer to help through his web site * * * The and officeholders qualified for the Federal candidate’s campaign by a commonwealth—indeed the nation—cannot afford media exemption). publication were covered by the news another four years of George Bush.’’). See also The Commission has considered story exemption); Advisory Opinion Charles Krauthammer, The Delusional Dean, whether an Internet video programming 1982–44 (Democratic National Washington Post, December 5, 2003 at A31 (op-ed by a syndicated columnist containing a solicitation operator that webcast content was Committee and Republican National for the Republican National Committee, including entitled to the media exemption when it Committee) (concluding that instructions on where readers should send provided coverage of the Democratic solicitations for a national party contributions).

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activities occurred that might otherwise equally deserving of consideration update their content on a frequent, but constitute coordination under under the media exemption.60 perhaps not fixed, schedule. Nor can Commission regulations.’’); Statement of Moreover, given that methods of ‘‘periodical publication’’ be restricted to Reasons of Commissioner Weintraub in communicating over the Internet ‘‘are works appearing in a bound, pamphlet MURs 5540, 5545, 5562, and 5570 (CBS, constantly evolving and difficult to form. To the extent that the conclusions Kerry/Edwards 2004, Sinclair categorize precisely,’’ the wholesale in Advisory Opinion 1980–109 are not Broadcasting) (‘‘I believe it is important exemption of any particular method of applicable to online media, that to emphasize that the press exemption Internet communication would be ill advisory opinion is hereby shields press entities from advised. Reno, 521 U.S. at 851. distinguished. The Commission notes investigations into alleged The Commission concludes that that media entities such as coordination.’’) bloggers and others who communicate WashingtonPost.com and More recently, the Commission has on the Internet are entitled to the press Drudgereport.com, as well as many determined that the media exemption exemption in the same way as blogs, are updated throughout the day applied to a blogger that covered and traditional media entities. This is in and function consistent with a dynamic carried news stories, commentaries, or keeping with the roles that bloggers play definition of periodical publication. editorials. In Advisory Opinion 2005– in the way that the public receives their 16, the Commission analyzed the news and information. Bloggers were X. 11 CFR 114.9—Use of Corporate or Internet activity of Fired Up! LLC issued press credentials for the National Labor Organization Facilities (‘‘Fired Up’’), an entity that maintained Nominating Conventions in 2004 61 and, In the NPRM, the Commission a network of Internet websites but had more recently, a blogger was issued proposed amending its rule regarding no offline media presence. The permanent press credentials as a the provision of corporate or labor Commission found that a primary member of the White House press organization facilities 64 in connection function of Fired Up’s websites was to corps.62 Bloggers who are covering and with a Federal election to clarify that an provide news and information to reporting news stories in the same way employee’s ‘‘occasional, isolated, or readers through commentary on, quotes that traditional media entities have incidental use’’ of computer equipment from, summaries of, and hyperlinks to reported on newsworthy events are and Internet services for Federal news articles appearing on other entitled to the same media exemption campaign activities would not be an entities’ websites and Fired Up’s protection that applies to media entities expenditure or contribution by the original reporting. The Commission such as CNN, NBC, and other traditional corporation or labor organization. Based viewed the posting of reader comments media.63 on the comments received in response to the website as similar to letters to the The Commission recognizes that the to the proposal, the Commission is not editor and noted that FiredUp retained Internet allows for constant, up-to-the- amending 11 CFR 114.9 precisely as editorial control over the content minute reporting and coverage. The proposed, but instead is reaching the displayed on its websites.57 The Commission has concluded that online same result by adding a new safe harbor Commission concluded that the providers of news stories, commentaries specifically allowing the use of activities of Fired Up’s websites were and editorials are within the press corporate and labor organization protected by the media exemption. exemption. This conclusion reflects a facilities for certain individual Internet The Commission has decided not to broad reading of ‘‘periodical activity in connection with a Federal change its rules regarding the media publication.’’ In Advisory Opinion election. exemption so as to exempt all blogging 1980–109 (James Hansen), the As noted above, corporations and activity from the definitions of Commission stated that a ‘‘periodical labor organizations are prohibited from ‘‘contribution’’ and ‘‘expenditure.’’ The publication’’ means ‘‘a publication in making contributions or expenditures, Commission believes that such an bound pamphlet form appearing at or facilitating the making of exemption for one technology-specific regular intervals (usually either weekly, contributions by certain persons, in category would be both too broad and bi-weekly, monthly or quarterly) and connection with a Federal election. 2 too narrow: it would apply equally to containing articles of news, information, U.S.C. 441b(a); 11 CFR 114.2(a), (b), and blogging activity ‘‘that [is] not involved or entertainment.’’ However, with the (f). However, corporations and labor in the regular business of imparting advent of the Internet, frequent updating organizations do not make contributions news to the public’’ 58 and of the content of a website has become or expenditures, or facilitate the making communications that are not news commonplace and is not tied to a of a contribution, by permitting stories, commentary or editorials within publishing schedule but to the fast pace ‘‘occasional, isolated, or incidental use’’ the meaning of the media exemption;59 of breaking news and the availability of of corporate or labor organization at the same time, it would overlook information. The Commission finds that facilities in connection with a Federal other forms of Internet communication, the term ‘‘periodical’’ within the election by stockholders and employees such as publishing websites in other meaning of the Act’s media exemption of a corporation and officials, members, formats or ‘‘podcasting,’’ that are ought not be construed rigidly to deny and employees of a labor organization. the media exemption to entities who See 11 CFR 114.2(f)(i) and 11 CFR 57 In Advisory Opinion 1982–44 (Democratic 114.9(a) and (b). Under section 114.9, National Committee and Republican National 60 See note 52 clarifying that the terms ‘‘Website’’ certain classes of individuals may use Committee) the Commission made clear that and ‘‘any Internet or electronic publication’’ are corporate or labor organization facilities ‘‘commentary’’ within the meaning of the press meant to address a wide range of technology that for Federal election purposes, but must exemption is not limited to commentaries made by may be used by entities entitled to the press the broadcaster. The Commission emphasized that exemption. reimburse the corporation or labor ‘‘commentary’’ was intended to allow third persons 61 See http://www.cnn.com/2004/TECH/internet/ organization to the extent that, if at all, access to the media to discuss issues. The statute 07/23/conventionbloggers/ (last visited 3/24/06). and regulations do not define the issues permitted 62 See http://www.foxnews.com/story/ 64 The Commission notes that under current 11 to be discussed or the format in which they are to 0,2933,149689,00.html (last visited 3/24/06). CFR 114.9 the term ‘‘facilities’’ covers a wide be presented under the ‘‘commentary’’ exemption.’’ 63 The Commission notes that media entities such variety of office equipment and supplies, including, 58 McConnell, 540 U.S. at 208. as the Washington Post, MSNBC, Fox News, and but not limited to, copiers, fax machines, 59 See id. (‘‘Section 304(f)(3)(B)(I)’s effect * * * CNN have bloggers reporting news and commentary telephones, printers, scanners, and meeting and excepts news items and commentary only.’’). on their Web sites. office space.

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its overhead or operating costs are adequate for election-related personal from completing the normal amount of increased by the individual’s Internet activities. As one commenter work for which the employee is paid or ‘‘occasional, isolated, or incidental use’’ stated, applying the time limitations of is expected to perform, as specified in of the facilities. See 11 CFR 114.9(a)(1) the safe harbor provision to Internet 11 CFR 100.54, does not increase the and (b)(1). However, if a stockholder or activities ‘‘is simply not realistic in overhead or operating costs of the employee of a corporation, or an official, today’s political environment.’’ corporation or labor organization, and member, or employee of a labor Many commenters argued that in light the activity is in no way coerced. organization, makes more than of the unique nature of Internet Thus, the new provisions of 11 CFR ‘‘occasional, isolated, or incidental use’’ activities and the portable nature of the 114.9 complement the provisions of 11 of corporate or labor organization computers and other facilities needed to CFR 100.94 and 100.155. Under 11 CFR facilities, and does not reimburse the conduct these activities, the 100.94 and 100.155, individuals are free corporation or labor organization within Commission should treat the use of to use whatever computer and Internet a commercially reasonable time at the corporate and labor organization facilities that are otherwise available to normal and usual rental charge for the facilities for Internet activities them to engage in uncompensated facilities used (rather than merely for differently from the use of such facilities Internet political activities. Under 11 the increase in overhead or operating for other activities. One commenter CFR 114.9, corporations and labor costs), then the corporation or labor stated: organizations may permit access to their computers and Internet facilities so that organization will have made a [I]t is now common for companies and prohibited contribution or expenditure. unions to permit (and at times encourage or stockholders, employees, members, and See 11 CFR 114.9(a)(3) and (b)(3).65 even require) employees to keep and use officials may conduct these activities. Although section 114.9 provides only company-or union-owned laptops during The final rules make clear that general guidance for determining what non-working hours. Thus, for many corporations and labor organizations constitutes ‘‘occasional, isolated, or employees, a company- or union-owned may not condition the availability of incidental use,’’ see 11 CFR computer is their primary or only home their facilities on their being used for 114.9(a)(1)(i) and (b)(1)(i), the section computer, and the employees are permitted political activity or on support for or does contain safe harbor provisions. The to make essentially unlimited personal use of opposition to any particular candidate those computers—including, for those so safe harbors provide that any use of inclined, for political speech on the Internet. or political party. See 11 CFR 114.9(a)(1) corporate or labor organization facilities, and 114.9(b)(1). Rather, corporations regardless of whether it occurs during or In light of these developments, the and labor organizations may permit use after working hours, is considered vast majority of commenters who of their facilities for political activities ‘‘occasional, isolated, or incidental use’’ addressed this topic, including to the extent these facilities are available if the use does not exceed one hour per commenters from several reform for other non-work-related purposes. week or four hours per month. See 11 organizations, argued that the In the new safe harbors, the CFR 114.9(a)(2)(ii) and (b)(2)(ii). Commission should abolish any time Commission is not quantifying a In the NPRM, the Commission restriction on the use of corporate or permissible level of use of corporate and proposed amending 11 CFR 114.9 to labor organization computers and other labor organization facilities for Internet clarify that the term ‘‘facilities’’ includes Internet equipment and services. activities. As one commenter explained, computers, software, and other Internet The Commission acknowledges that ‘‘any organization, union or corporation, equipment and services, but the personal use of corporate and labor is going to have policies that control Commission noted that an individual’s organization laptops, e-mail, Internet [the ability of employees or staff to use use of corporate or labor organization service, and other similar facilities is corporate facilities and union facilities], computers and Internet services for often permitted, and the Commission that restrict [such use] in order for it to campaign activity over the Internet at agrees with these commenters that it do its ordinary business. And [] you can home, or at locations outside of work, would serve little purpose for leave it to these organizations acting would remain subject to the Commission regulations to prohibit or sensibly that they are not going to have ‘‘occasional, isolated, or incidental use’’ overly restrict such common uses of a workplace where anyone can, to an restriction. facilities. The Commission agrees with a unlimited amount, [at least] on the job, Comments on the Commission’s commenter who said ‘‘[c]orporate or use their facilities for private pursuits, proposal to amend 11 CFR 114.9 were labor organization provision of a political pursuits, anything unrelated to mixed. Some commenters did not think computer and Internet access is not the organization’s mission.’’ that the rule needed clarification analogous to the use of a building or Additionally, because 11 CFR 100.54 because the language of the current rule facility, either in financial or practical applies to the safe harbors at 11 CFR is already flexible enough to cover terms. What would be comparable is 114.9(a)(2) and 114.9(b)(2), employees corporate and labor organization providing a pen and paper.’’ must complete their normal work in computers and Internet services used for Accordingly, the Commission is order to avail themselves of these safe political activity. Others commented amending 11 CFR 114.9 to add new safe harbors. Thus, individual Internet that an explicit extension of § 114.9 to harbors specifically addressing the activities must be undertaken on the cover computers and Internet services provision of corporate or labor individual’s own time. would be ‘‘appropriate’’ and organization facilities for Internet One witness testified that ‘‘a lot of us ‘‘reasonable.’’ A number of commenters activities. See 11 CFR 114.9(a)(2)(ii) and work at all hours of the day, and it’s argued that the safe harbor of one hour (b)(2)(ii). The new safe harbors provide very useful to be able to use the a week or four hours a month was not that a corporation or labor organization computer at the office for some of our may permit its employees, shareholders, personal work as well, whatever that 65 The Commission notes that an individual using officials, and members to use its may be * * * [to be limited to 1 hour corporate or labor organization facilities to engage computer and Internet facilities for per week and 4 hours per month is] in personal uncompensated Internet activities will volunteer individual Internet activity, as basically just forcing people to kind of not make a contribution or expenditure because such Internet activities by individuals is exempt defined in 11 CFR 100.94, without a live an abnormal life.’’ The reference to under new 11 CFR 100.94 and 100.155, as contribution resulting, provided that the 11 CFR 100.54 is meant to address this discussed above. activity does not prevent an employee type of situation and confirm that so

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long as the campaign activity does not, Commission is also adding new committees that do not meet the as one witness stated, ‘‘interfere with paragraph (e) to § 114.9 to indicate that definition of ‘‘small organization.’’ Most their normal work,’’ i.e. the normal this section does not alter other political committees are not amount of work that the employee provisions of 11 CFR part 114 regarding independently owned and operated usually performs, no contribution will communications to and beyond a because they are not financed by a small result. corporation’s or labor organization’s identifiable group of individuals. Most The reference to 11 CFR 100.54 restricted class. political committees rely on applies to the safe harbors at 11 CFR The Commission is also making contributions from a large number of 114.9(a)(2) and (b)(2). Thus, while there technical amendments to 11 CFR 114.9 individuals to fund the committees’ is no specific time limit on Internet to restructure the format of the existing operations and activities. activities, employees must complete safe harbor. This change does not alter To the extent that any State party their normal work in order to avail the substance of the rule or the existing committees representing minor political themselves of these safe harbors. A safe harbor, but merely provides a parties or any other political committees corporation or labor organization may clearer rule structure to accommodate might be considered ‘‘small not subsidize the activity by, for the new safe harbor provision. organizations,’’ the number affected by example, reducing an employee’s this proposed rule is not substantial. workload to provide extra time for Certification of No Effect Pursuant to 5 U.S.C. 605(b) Additionally, the proposed rule campaign activities at corporate or labor preserves the Commission’s general organization expense. Subject to those Regulatory Flexibility Act exclusion of Internet communications conditions, there is no ceiling on the from the scope of regulation, and only amount of time that an employee may The Commission certifies that the State, district, and local political parties spend in a given day or week engaging attached final rules will not have a and candidates could be subject to in online political activities. significant economic impact on a In addition to the safe harbors for the substantial number of small entities. different funding requirements for use of corporate or labor organization The basis for this certification is that the certain communications. Accordingly, facilities to engage in Internet activities, individuals and not-for-profit entities to the extent that any other entities may the Commission is also preserving the affected by these proposed rules are not fall within the definition of ‘‘small one hour per week/four hours per ‘‘small entities’’ under 5 U.S.C. 601. The entities,’’ any economic impact of month safe harbors, which will continue definition of ‘‘small entity’’ does not complying with these rules will not be to apply across-the-board to usage of all include individuals, but classifies a not- significant. types of corporate and labor for-profit enterprise as a ‘‘small List of Subjects organization facilities. See 11 CFR organization’’ if it is independently 114.9(a)(2)(i) and 114.9(b)(2)(i). owned and operated and not dominant 11 CFR Part 100 in its field. 5 U.S.C. 601(4). In the NPRM, the Commission sought Elections. comment on whether additional rules State, district, and local party would be necessary to ensure that committees affected by these proposed 11 CFR Part 110 corporations and labor organizations did rules are not-for-profit committees that Campaign funds, Political committees not ‘‘coerce’’ their employees or others do not meet the definition of ‘‘small and parties. into engaging in campaign activities organization.’’ State political party over the Internet. The Commission committees are not independently 11 CFR Part 114 received unanimous agreement from owned and operated because they are commenters addressing this issue that not financed and controlled by a small Business and industry, elections, the current rules prohibiting corporate identifiable group of individuals, and labor. and labor organization coercion for they are affiliated with the larger I For the reasons set out in the contributions or fundraising activities national political party organizations. In preamble, the Federal Election are sufficient to prevent such behavior addition, the State political party Commission amends Subchapter A of regarding Internet activities. Since the committees representing the Democratic Chapter 1 of Title 11 of the Code of new safeguards for individual Internet and Republican parties have a major Federal Regulations as follows: activity encompass more than controlling influence within the fundraising activities, however, the political arena of their State and are PART 100—SCOPE AND DEFINITIONS Commission is adding new provisions at thus dominant in their field. District (2 U.S.C. 431) 11 CFR 114.9(a)(2)(ii)(C) and (b)(2)(ii)(C) and local party committees are generally to ensure that every individual is free to considered affiliated with the State I 1. The authority citation for part 100 express his or her own views, without committees and need not be considered continues to read as follows: fear of reprisal. The Commission notes separately. Authority: 2 U.S.C. 431, 434, and 438(a)(8). that corporations and labor Separate segregated funds affected by I organizations providing their facilities these proposed rules are not-for-profit 2. Section 100.25 is republished to to their employees, stockholders, political committees that do not meet read as follows: officials, or members remain subject to the definition of ‘‘small organization’’ § 100.25 Generic campaign activity (2 the prohibitions contained in 11 CFR because they are financed by a U.S.C. 431(21)). 114.2, which includes a prohibition on combination of individual contributions the use of coercion, including threat of and financial support for certain Generic campaign activity means a detrimental job action, any other expenses from corporations, labor public communication that promotes or financial reprisal, or force, to urge any organizations, membership opposes a political party and does not individual to make a contribution or organizations, or trade associations, and promote or oppose a clearly identified engage in fundraising activities on therefore are not independently owned Federal candidate or a non-Federal behalf of a candidate or political and operated. candidate. committee. See 11 CFR 114.2(f)(2)(iv); Most other political committees I 3. Section 100.26 is revised to read as see also 2 U.S.C. 441b(b)(3). The affected by these rules are not-for-profit follows:

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§ 100.26 Public communication (2 U.S.C. is not limited to: Computers, software, another person’s website; blogging; 431(22)). Internet domain names, Internet Service creating maintaining or hosting a Public communication means a Providers (ISP), and any other website; paying a nominal fee for the communication by means of any technology that is used to provide use of another person’s website; and any broadcast, cable, or satellite access to or use of the Internet. other form of communication communication, newspaper, magazine, (d) Paragraph (a) of this section also distributed over the Internet. outdoor advertising facility, mass applies to any corporation that is wholly (c) Equipment and services. For the mailing, or telephone bank to the owned by one or more individuals, that purposes of this section, the term general public, or any other form of engages primarily in Internet activities, ‘‘equipment and services’’ includes, but general public political advertising. The and that does not derive a substantial is not limited to: Computers, software, term general public political advertising portion of its revenues from sources Internet domain names, Internet Service shall not include communications over other than income from its Internet Providers (ISP), and any other the Internet, except for communications activities. technology that is used to provide placed for a fee on another person’s Web (e) This section does not exempt from access to or use of the Internet. site. the definition of contribution: (d) Paragraph (a) of this section also I 4. The introductory text of § 100.73 is (1) Any payment for a public applies to any corporation that is wholly revised to read as follows: communication (as defined in 11 CFR owned by one or more individuals, that 100.26) other than a nominal fee; engages primarily in Internet activities, § 100.73 News story, commentary, or (2) Any payment for the purchase or and that does not derive a substantial editorial by the media. rental of an e-mail address list made at portion of its revenues from sources Any cost incurred in covering or the direction of a political committee; or other than income from its Internet carrying a news story, commentary, or (3) Any payment for an e-mail address activities. editorial by any broadcasting station list that is transferred to a political (e) This section does not exempt from (including a cable television operator, committee. the definition of expenditure: programmer or producer), Web site, I 6. The introductory text of § 100.132 (1) Any payment for a public newspaper, magazine, or other is revised to read as follows: communication (as defined in 11 CFR periodical publication, including any 100.26) other than a nominal fee; Internet or electronic publication, is not § 100.132 News story, commentary, or (2) Any payment for the purchase or a contribution unless the facility is editorial by the media. rental of an e-mail address list made at owned or controlled by any political Any cost incurred in covering or the direction of a political committee; or party, political committee, or candidate, carrying a news story, commentary, or (3) Any payment for an e-mail address in which case the costs for a news story: editorial by any broadcasting station list that is transferred to a political * * * * * (including a cable television operator, committee. programmer or producer), Web site, I 5. Section 100.94 is added to subpart newspaper, magazine, or other PART 110—CONTRIBUTION AND C to read as follows: periodical publication, including any EXPENDITURE LIMITATIONS AND § 100.94 Uncompensated Internet activity Internet or electronic publication, is not PROHIBITIONS by individuals that is not a contribution. an expenditure unless the facility is I 8. The authority citation for part 110 (a) When an individual or a group of owned or controlled by any political continues to read as follows: individuals, acting independently or in party, political committee, or candidate, coordination with any candidate, in which case the cost for a news story: Authority: 2 U.S.C. 431(8), 431(9), authorized committee, or political party * * * * * 432(c)(2), 437d, 438(a)(8), 441a, 441b, 441d, committee, engages in Internet activities I 7. Section 100.155 is added to read as 441e, 441f, 441g, 441h, and 36 U.S.C. 510. for the purpose of influencing a Federal follows: I 9. Paragraph (a) of § 110.11 is revised election, neither of the following is a to read as follows: contribution by that individual or group § 100.155 Uncompensated Internet activity of individuals: by individuals that is not an expenditure. § 110.11 Communications; advertising; (1) The individual’s uncompensated (a) When an individual or a group of disclaimers (2 U.S.C. 441d). personal services related to such individuals, acting independently or in (a) Scope. The following Internet activities; coordination with any candidate, communications must include (2) The individual’s use of equipment authorized committee, or political party disclaimers, as specified in this section: or services for uncompensated Internet committee, engages in Internet activities (1) All public communications, as activities, regardless of who owns the for the purpose of influencing a Federal defined in 11 CFR 100.26, made by a equipment and services. election, neither of the following is an political committee; electronic mail of (b) Internet activities. For the expenditure by that individual or group more than 500 substantially similar purposes of this section, the term of individuals: communications when sent by a ‘‘Internet activities’’ includes, but is not (1) The individual’s uncompensated political committee; and all Internet limited to: Sending or forwarding personal services related to such websites of political committees electronic messages; providing a Internet activities; available to the general public. hyperlink or other direct access to (2) The individual’s use of equipment (2) All public communications, as another person’s Web site; blogging; or services for uncompensated Internet defined in 11 CFR 100.26, by any person creating, maintaining or hosting a Web activities, regardless of who owns the that expressly advocate the election or site; paying a nominal fee for the use of equipment and services. defeat of a clearly identified candidate. another person’s Web site; and any (b) Internet activities. For the (3) All public communications, as other form of communication purposes of this section, the term defined in 11 CFR 100.26, by any person distributed over the Internet. ‘‘Internet activities’’ includes, but is not that solicit any contribution. (c) Equipment and services. For the limited to: Sending or forwarding (4) All electioneering communcations purposes of this section, the term electronic messages; providing a by any person. ‘‘equipment and services’’ includes, but hyperlink or other direct access to * * * * *

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PART 114—CORPORATE AND LABOR (B) The activity does not increase the (A) As specified in 11 CFR 100.54, the ORGANIZATION ACTIVITY overhead or operating costs of the activity does not prevent the employee corporation; and from completing the normal amount of I 10. The authority citation for part 114 (C) The activity is not performed work for which the employee is paid or is revised to read as follows: under coercion. is expected to perform; (B) The activity does not increase the Authority: 2 U.S.C. 431(8), 431(9), 432, (3) A stockholder or employee who 434, 437d(a)(8), 438(a)(8), 441b. makes more than occasional, isolated, or overhead or operating costs of the labor incidental use of a corporation’s organization; and I 11. In § 114.9, paragraphs (a) and (b) facilities for individual volunteer (C) The activity is not performed are revised and new paragraph (e) is activities in connection with a Federal under coercion. added to read as follows: election is required to reimburse the (3) The officials, members, and employees who make more than § 114.9 Use of corporate or labor corporation within a commercially organization facilities. reasonable time for the normal and occasional, isolated, or incidental use of usual rental charge, as defined in 11 a labor organization’s facilities for (a) Use of corporate facilities for CFR 100.52(d)(2), for the use of such individual volunteer activities in individual volunteer activity by facilities. connection with a Federal election are stockholders and employees. (b) Use of labor organization facilities required to reimburse the labor (1) Stockholders and employees of the for individual volunteer activity by organization within a commercially corporation may, subject to the rules officials, members, and employees. reasonable time for the normal and and practices of the corporation and 11 (1) The officials, members, and usual rental charge, as defined in 11 CFR 100.54, make occasional, isolated, employees of a labor organization may, CFR 100.52(d)(2), for the use of such or incidental use of the facilities of a subject to the rules and practices of the facilities. corporation for individual volunteer labor organization and 11 CFR 100.54, * * * * * activity in connection with a Federal make occasional, isolated, or incidental (e) Nothing in this section shall be election and will be required to use of the facilities of a labor construed to alter the provisions in 11 reimburse the corporation only to the organization for individual volunteer CFR Part 114 regarding communications extent that the overhead or operating activity in connection with a Federal to and beyond a restricted class. costs of the corporation are increased. A election and will be required to Dated: March 27, 2006. corporation may not condition the reimburse the labor organization only to Michael E. Toner, availability of its facilities on their being the extent that the overhead or operating used for political activity, or on support costs of the labor organization are Chairman, Federal Election Commission. for or opposition to any particular increased. A labor organization may not [FR Doc. 06–3190 Filed 4–11–06; 8:45 am] candidate or political party. As used in condition the availability of its facilities BILLING CODE 6715–01–P this paragraph, occasional, isolated, or on their being used for political activity, incidental use generally means— or on support for or opposition to any (i) When used by employees during particular candidate or political party. DEPARTMENT OF THE TREASURY working hours, an amount of activity As used in this paragraph, occasional, which does not prevent the employee isolated, or incidental use generally Office of Thrift Supervision from completing the normal amount of means— work which that employee usually (i) When used by employees during 12 CFR Part 563e carries out during such work period; or working hours, an amount of activity [No. 2006–16] (ii) When used by stockholders other during any particular work period than employees during the working which does not prevent the employee RIN 1550–AB48 period, such use does not interfere with from completing the normal amount of Community Reinvestment Act— the corporation in carrying out its work which that employee usually Community Development normal activities. carries out during such work period; or (2) Safe harbor. For the purposes of (ii) When used by members other than AGENCY: Office of Thrift Supervision, paragraph (a)(1) of this section, the employees during the working period, Treasury (OTS). following shall be considered such use does not interfere with the ACTION: Final rule. occasional, isolated, or incidental use of labor organization in carrying out its corporate facilities: normal activities. SUMMARY: In this final rule, OTS is (i) Any individual volunteer activity (2) Safe harbor. For the purposes of revising the definition of ‘‘community that does not exceed one hour per week paragraph (b)(1) of this section, the development’’ in its Community or four hours per month, regardless of following shall be considered Reinvestment Act (CRA) regulations to whether the activity is undertaken occasional, isolated, or incidental use of reduce burden and provide greater during or after normal working hours; or labor organization facilities: flexibility to meet community needs. (ii) Any such activity that constitutes (i) Any individual volunteer activity The change is designed to encourage voluntary individual Internet activities that does not exceed one hour per week savings associations to increase their (as defined in 11 CFR 100.94), in excess or four hours per month, regardless of community development lending, of one hour per week or four hours per whether the activity is undertaken qualified investments, and community month, regardless of whether the during or after normal working hours; or development services in distressed or activity is undertaken during or after (ii) Any such activity that constitutes underserved rural areas and designated normal working hours, provided that: voluntary individual Internet activities disaster areas. This change will make (A) As specified in 11 CFR 100.54, the (as defined in 11 CFR 100.94), in excess OTS’s definition of ‘‘community activity does not prevent the employee of one hour per week or four hours per development’’ and the definition of the from completing the normal amount of month, regardless of whether the other federal banking agencies uniform. work for which the employee is paid or activity is undertaken during or after OTS is also making a technical change is expected to perform; normal working hours, provided that: to conform the lettering of its definitions

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