Letter to the FEC on the Federal Election Campaign Act to the Internet

Rosemary C. Smith Federal Election Commission
999 E Street, NW
Washington, DC 20463

Re: Notice of Inquiry, 1999-24

We welcome the Commission's examination of the application of the Federal Election Campaign Act (FECA) to the Internet.

The organizations submitting this comment, described in Attachment A, represent a wide range of interests and have different views on campaign reform and the constitutionality of FECA. 1 But we are united in our belief that the Internet is a unique communications medium whose very architecture and economics offer an opportunity to reinvigorate political discourse and improve the quality of the electoral process by providing a platform from which individuals can engage in political speech outside the control of candidates, political parties, and the traditional media gatekeepers. While many of our organizations do not participate in or comment upon federal election campaigns, many of our organizations use the Internet to communicate and organize on issues of public policy. We firmly believe that the democratizing potential of the Internet will be compromised if the Commission adopts a regulatory approach that seeks to apply to the Internet speech of individuals and organizations other than political parties and campaign committees the types of limitations imposed on the radio and television commercials of parties and campaigns. For these reasons, we welcome this inquiry.

We strongly urge the Commission to proceed cautiously because we believe that the onset of the 2000 elections does not afford the Commission sufficient time to deal comprehensively with the complex and constitutionally significant issue of campaign-related speech on the Internet. As the Supreme Court made clear in its landmark decision on Internet speech, 2 understanding the medium is critical to adopting an approach that will effectively achieve valid public policy goals in a manner consistent with the First Amendment.

Rather than compelling swift resolution of all issues, the impending election offers both a reason for caution and an opportunity for study. This election may represent a turning point in the use of the Internet, a medium that may eventually break the dominance of television. In the midst of such change and experimentation, the Commission should not seek to regulate comprehensively but rather should use this opportunity to study how individuals and those not associated with the political parties or the candidates use this new medium. Only thereafter can the Commission safely identify any areas where regulatory intervention may be appropriate and consistent with FECA and Constitutional guarantees.

The only Commission action that is desirable at this time is to make it clear that the Internet speech of most individuals will be considered to fall below the threshold for FECA regulation. A simple rule on valuation of computer-related expenses will suffice to remove much of the cloud over the Internet advocacy of individuals and open up the use of the Internet. At this time unregulated Internet speech by individuals appears far more likely to advance than hinder the goals of FECA. Imposing on Internet political speech the rules designed for radio and TV is most likely to stifle political speech by the very individuals and organizations that FECA is intended to empower.

For these reasons, we urge the Commission to:

• Delay any attempt at comprehensive rulemaking until after the 2000 election cycle;
• Create, through a clear statement on valuation, a "safe harbor" for Internet political speech by individuals during the 2000 election cycle; and,
• Take a cautious approach to online campaign-related activities during the 2000 election cycle by entities such as corporations, labor unions, educational entities, and non-profit entities, other than candidates, political parties, and PACs, acting narrowly in response to advisory opinion requests and complaints and to redress clear violations of existing law.

I. The Internet Is a Unique Medium, Whose Architecture and Economics Inherently Support Abundant, Inexpensive and Diverse Speech

The Internet, by virtue of its unique characteristics, advances the goals of the campaign finance law. The architecture and economics of the Internet offer a unique opportunity to achieve the thriving marketplace of ideas central to FECA's vision of healthy elections. The Internet is distributed, abundant, and relatively inexpensive. Its architecture severs the link between money and effective speech, turning individual citizens into speakers, and enabling cheap message distribution.

A. Fundamental characteristics of the Internet distinguish it from other media

The architecture and economics of the Internet distinguish it from the expenditures on mass media that figured so prominently when FECA was enacted.

-- Distributed, open and abundant

The traditional mass media (newspapers, radio and television) are based on systems of limited distribution channels under the control of a relatively small number of entities, or gatekeepers. In contrast, the Internet is decentralized, open and distributed, a network of networks consciously designed to function without gatekeepers. Thus, while the architecture of mass media creates scarcity, the Internet's architecture accommodates a virtually unlimited number of speakers. As the Supreme Court stated, "Unlike the conditions that prevailed when Congress first authorized regulation of the broadcast spectrum, the Internet can hardly be considered a scarce expressive commodity. It provides relatively unlimited, low-cost capacity for communication of all kinds...3 Even the print media, while structurally open, are economically closed to all but the wealthiest of individuals. The decentralized and open nature of the Internet supports a growing diversity of political messages. Campaigns, political action committees, and news organizations do not dominate the production and distribution of messages online. For every "official" candidate Web site, there are hundreds of "unofficial" sites speaking about the candidates' views and advocating their election or defeat.

-- Inexpensive

The campaign finance law reflects the economics of the mass media, where speaking effectively is expensive and those with extensive resources can literally outbid less well financed interests for the right to speak. In contrast, on the Internet, "talk is cheap." The low economic barriers to accessing the Internet allow it to sustain a level of speech by and among individuals and loosely organized groups unparalleled in other media. It is the first electronic medium to offer every individual the possibility of being a publisher.

Email, Web sites, and other online forums offer a method of disseminating opinions and messages nearly devoid of incremental costs -- particularly when compared to other means of communicating to the public. Free email accounts and public Internet access at libraries and other public places allow individuals to engage in virtually free speech. Armed with an email account and using any one of thousands of "listserves," an individual can send a mass emailing to hundreds of thousands of individuals with little expense. Increasing numbers of Internet service providers and portals offer free "hosting" and provide tools for Web site creation as part of their subscriber package, enabling individuals to create Web sites practically free of charge. Even where an Internet account costs money, the incremental cost associated with the creation of a Web page is negligible.

While many individuals purchase their own computer and subscribe to a fee-based phone line and purchase Internet access from an Internet Service Provider, few of these individuals purchase these services for the purpose of influencing elections. Rather, as computers and Internet access are integrated into society, individuals increasingly will use them as they have phones, friendships and front yards to influence the outcomes of elections.

-- User-controlled and interactive

Unlike television and radio, which offer individuals little opportunity to make decisions about what information they receive, the Internet is a user-controlled medium, where individuals can choose the information that they come in contact with. On the Internet, each individual is able to seek out information of interest rather than being served a fixed plate of information.

In turn, candidates, like all online content providers, are able to provide, and are encouraged by the medium to offer, a wider range of information than feasible in print, radio, or television. Compared to other media, the Internet presents few, if any, economic disincentives to publishing more information. Unlike print where costs are associated with the materials of printing and the distribution of additional copies, or television where each 30-second segment bears a price tag, the cost of publishing additional "pages" or words is nominal.

The user-controlled nature of the Internet combined with the removal of economic barriers to making additional information available contribute to the growing abundance of information from both traditional and non-traditional sources.

Unlike the one-way transmission capacity typical of radio and television, the Internet is bi-directional in nature. Individuals can speak as well as listen. The interactivity of the Internet alters the behavior of speakers. The brief one-way transmissions typical of election-related speech on radio and television lend themselves to the repetition of sound bites. The public is unable to ask for more information, the candidates find it expensive to provide more information, and opponents are unable to respond or comment. In contrast, the bi-directional nature of the Internet allows individuals to review a candidate's full policy statements, to compare them easily with the statements of other candidates, to respond and ask follow-up questions, and to challenge the candidate to further expand or reconsider their positions.

-- Global

The Internet is a global medium. It allows communication and interaction on a global scale. Web sites outside a country's boundaries are as accessible as those within. The Internet allows information, including political information, to flow quickly and seamlessly from one nation to the next without passing through checkpoints. The global nature of the Internet raises serious questions about the effectiveness of restrictions on expression and troubling issues for those charged with enforcement.4

B. Assumptions about campaign speech that influenced the structure and application of campaign finance law are inconsistent with campaign speech on the Internet

Existing campaign finance law is based on several assumptions that reflect the nature of traditional mass media. Because the characteristics of traditional mass media have so deeply influenced interpretation of the campaign finance law, many traditional interpretations of FECA should not apply to the speech enabled by the Internet's vastly different architecture.

First and foremost, FECA assumes that speech is expensive and that therefore money inextricably determines the amount and impact of political speech. In contrast, the Internet greatly reduces the cost of speech. Because the initial startup costs of becoming a speaker are relatively low and, once the investment is made, the difference between communicating to a single individual and communicating to masses of individuals is incremental, the effect of money on message creation and dissemination is vastly diminished in the online environment.

In addition, the campaign finance law assumes that the content of political speech (at least the political speech that matters) will be controlled by a relatively small set of entities created to influence elections. The law has assumed that there is a distinction between speakers and listeners, that the speakers will be the candidates (and their committees and parties), and that most citizens will participate in the campaign process not by speaking but by contributing money. Under this traditional scenario, to the extent that individuals become involved in the political process as "volunteers," it has been assumed they will not be speaking, but rather will be disseminating material (mainly printed material) produced by the campaign. Consequently, the FECA exempts the value of services by "volunteers," on the assumption that volunteers will not be speakers. On the Internet, in contrast, anybody can be a speaker. A "volunteer" can create a Web site as good as the campaign webmaster's. A volunteer on a well-subscribed list or chatroom or a frequently visited newsgroup can reach thousands of potential voters.

There are other differences between the traditional mass media and the Internet, one having to do with the role of advertising. Television and radio work exclusively on the advertising model: advertisements pay for the content. By and large, on television and radio the content is not political in nature. Most content providers on radio and television are studiously apolitical in their programming. To the extent there is content regarding politics, it is in the form of news, which is exempt from FECA. By and large, on television and radio, the only way that political speech is broadcast outside of the news is in the form of very expensive paid political advertisements.

On the Internet, the distinctions between content, news and advertisement are very different. There is a great deal of political content not supported by any advertising. On the Internet, most political content is not in the form of paid advertisements; it is in the form of freestanding Web pages. On the Internet, there is no economic disincentive for political content. Today, on the Internet candidates do not spend large sums of money on paid political advertisements supporting the (sports, news and entertainment) content of others. To the extent that candidates "advertise" on the Internet, they do it the way everybody else does, with banner ads that seek to lure viewers to the freestanding content at the candidate's Web site. Rather than purchasing the opportunity to reach a practically guaranteed set of eyeballs or ears from a limited number of gatekeepers -- the model of print and broadcast - Internet speakers must develop other strategies to attract users to their information. Today, a small portion of the traffic to a political Web site may be generated by banner ads, but the majority of the traffic to the site will be generated by unpaid hyperlinks provided at other Web sites, search engines, portals, and individuals.

While future changes to the architecture and economics of the Internet could change the cost of speech and limit the diversity of speakers, today, speech on the Internet is robust, diverse, and inexpensive.

C. The Internet is Used for Political Speech in Ways Quite Unlike the Regulated Advertising of the Traditional Media

In addition to broadening the number and diversity of speakers, the Internet creates opportunities for new forms of speech. Real-time dialogues can be hosted, creating a parallel to the town hall meeting without the time and expense. Conversations can be held outside of real-time, as postings on Web sites form "threaded" discussions on specific topics, which can be archived and returned to at any time.5 From their virtual platforms, individuals and organizations are publishing newsletters,6 voter's guides7 and other election-related materials; creating dynamic forums that support issue-based organizing, interactive discussions, and political advocacy; 8and registering voters. To the political buttons and bumper stickers common offline (the sporting of which is unregulated by the FEC), individuals can append to their email signature lines messages endorsing or opposing candidates, perhaps with a link to the candidate's Web site.

Ironically, many Web sites containing express advocacy, particularly those created by individuals, are rarely visited by the general public.9 It is increasingly common for individuals to have Web sites that combine the personal and the political.10 Called "home pages," these sites may contain photos of the family vacation, contact information for a personal business, and information about the individual's hobbies, opinions, and sensibilities. As the campaign season grows near, more and more of these sites will sport virtual "signs" endorsing or opposing one or more candidates. These sites are not at all similar to paid advertisements. They are clearly messages about elections and they may sway some voters, but the look and feel of such sites is far from that of a newspaper or television advertisement.

Web rings, a growing phenomenon, allow like-minded individuals to network their Web sites through the creation of a common logo and system for linking to and listing Web participants. Today, the Webrings Web site indicates an enormous list of rings dedicated to election-related activities. (See Attachment C.) Likewise, web services such as E-groups and E-circles host hundreds of politically oriented discussions. (See Attachment B.) While some may be "official organizations," the majority are likely to be independent of the campaigns.

Other Web sites function more as meeting places than billboards. While they post information supporting or criticizing a candidate, the sites' primary purpose is to provide a meeting place and forum for discussion for individuals interested in electing or defeating a specific candidate.11 Such sites allow individuals to exchange information, organize, and discuss around a specific candidate or issue. The site may contain a mailing list, a method of posting information to the site itself, and other avenues of communication amongst interested visitors. The goal of such sites is to attract and organize like-minded individuals -- if the site's messages influence the general public, it is a side benefit. In general, these sites are used as a communication tool where "members" can share information and pool resources. Unlike the typical "home page," these sites are often a collective effort. In some instances, multiple individuals may alter the content displayed to visitors.

At this time, it is certain that the majority of political Web sites do not function like advertisements or other statements to the general public in traditional media.

On the Internet, no one is bombarded by unwanted political speech in the way that campaign ads can blanket the radio and TV. So Internet speech, while publicly available, should be treated differently. While interested individuals can find these sites through search engines --- the rough equivalent of telephone directories -- and reciprocal hyperlinks from other sympathetic sites, few, if any, of these sites use banner advertisements, unsolicited email messages, or other Internet advertising methods to place their message before the public. Unlike mass media where general public statements assault the public through the airwaves and television advertisements, Web sites are rarely thrust upon the public. Web sites survive because interested people seek them out, find the message worth consideration or adherence and pass the site's address (URL) along to others either through hyperlinks or email messages.

D. Characteristics of the Internet naturally promote cleaner, more informed elections without FEC intervention

The goals of campaign finance regulation would be best achieved by not regulating the individual, grass-roots campaign and election-related activity on the Internet:

-- Reducing the impact of money during campaigns and preventing the corruption or undue influence that stems from the demands of fundraising

Supporters of campaign finance restrictions argue that the role of money in politics fosters inequality in our democratic system. FECA reflects the belief that wealthy individuals and corporations and well-financed political action groups thwart the one person, one vote principle. The stated goal of FECA was to "broaden the diversity of groups that can have an input on the election process" and to "return our electoral process to the people." Election law supporters argue that large contributors are able to buy influence with legislators. A central purpose stated by the drafters of FECA was to "avoid corruption" and "reduce the corrupting influence of big money in Federal elections."

The Internet reduces the importance of money. It is an inherently equalizing force for non-candidates and minor candidates to participate in campaign discussions in ways previously reserved to well-funded candidates. In 1998, 64% of major-party challengers and non-incumbents running for the U.S. House, Senate, and Governorships had campaign Web sites, whereas only 28% of incumbents did.12 The Internet reduces the importance of money. It is an inherently equalizing force for non-candidates and minor candidates to participate in campaign discussions in ways previously reserved to well-funded candidates. In 1998, 64% of major-party challengers and non-incumbents running for the U.S. House, Senate, and Governorships had campaign Web sites, whereas only 28% of incumbents did. The Internet empowers all users with the ability to speak to a large audience. A single wired individual can be powerful: one man organized over 100 campus protests against the Republican Party's Contract with America from his basement computer.13

Much of the speech enabled by the Web is extremely inexpensive. If the sunk costs of computer equipment are removed from the calculation -- as we believe they should be in all but a narrow class -- nearly every Web site created and maintained by an individual, or a loosely affiliated group of individuals, is well under the limits set for contributions and independent expenditures.

-- Improving the quality of electoral debate

The dominance of television is said to degrade the quality of election-related information available to citizens and thereby to decrease informed voting. Online, voters can easily check distorted candidate or organization statements. A search for a candidate name is sure to deliver not only the candidate's views on an issue but critiques and criticisms of the candidate's position and other relevant information.14 Through linking and searching, opposing points of view and responses to a candidate's claims will be simultaneously available to individuals. Special interest groups can and will spend large sums on Internet political efforts, but individuals and smaller groups can inexpensively build Web sites responding to or critiquing candidate and interest group statements. 15

-- Ensuring competitive elections

Supporters of campaign finance restrictions and other reforms point out that most campaigns are not truly competitive, most often because incumbents have a clear advantage. The Internet offers a new opportunity to challengers. As noted before challengers are making use of the Web. The Democracy Online Project found a strong correlation between the competitiveness of a race and the likelihood that one or both candidate had Web sites. Clearly, candidates already knew by the last election cycle that the Internet enhances competition.

The Jesse Ventura campaign is frequently cited as the leading example of how an outsider used the Internet to overcome the advantage of money and traditional organization: "An independent with no party structure or endorsements, all [Ventura] had was fame, blunt-spoken ideas - and the Net. For months Ventura had no physical 'headquarters,' just an ever-growing e-mail list. Two thirds of his fund-raising pledges arrived via the Internet. His final, three-day, get-out-the-vote bus trip was organized by e-mail. Ventura's site never was fancy. No elaborate graphics. It was a simple, text-based community of Ventura fans. The network generated a surge at the end, especially among young, new voters - an age group, not coincidentally, that grew up online. He won half the under-30 vote in a three-way race. 'The Internet didn't win it for us,' says Ventura Webmaster Phil Madsen, 'but we couldn't have won without it.'" 16

II. The FEC Should Refrain from Comprehensive Rulemaking until after the 2000 Election Cycle

The architectural and economic traits of the Internet de-emphasize the importance of money. The resulting quantitative and qualitative changes in campaign speech demand a reassessment of the application of campaign finance law to this new medium. But a full exploration of this new communications platform requires a deliberative process supported by a broad, inclusive factual record. Whether the Commission eventually needs to undertake such an effort, now is not the appropriate time. If the Commission were to embark on a rulemaking on the heels of the NOI, it would raise the likelihood of rules being issued, at the earliest, late in the election year, r