As an open, inexpensive and decentralized medium, the Internet offers ordinary citizens an opportunity to express political opinions and participate in electoral activities. The Internet supports an abundance and diversity of speech not possible in other media - much of it spontaneous and independent from campaign committees and the political parties. The result has been an explosion of democratic participation outside the control of the mainstream media or big money interests.
Over the past decade, in response to the dramatic impact of the Internet on politics, the question has arisen periodically whether the Internet should be subject to federal campaign finance law. The campaign finance law, originally adopted in 1971, was aimed at decreasing the influence of money on elections. Campaign finance reformers were concerned with the corrupting influence of money, the domination of expensive TV advertisements, and the resulting drop in the quality of electoral debate. Among other things, the campaign finance law limits individual contributions, prohibits corporate contributions, and requires disclosure of big contributions and the sponsorship of advertisements.
The original campaign finance rules were designed for the centralized, scarce, and expensive nature of traditional media. They were ill-suited to the decentralized, abundant, and inexpensive nature of the Internet.
In October 1999, CDT issued a report warning of the risks that a regulatory approach posed to free expression and democratic values. Entitled "Square Pegs and Round Holes: Applying the Campaign Finance Law to the Internet," this paper described the unique architectural and economic characteristics of the Internet and explores their impact on political and campaign-related speech and activities. It then discussed the framework, assumptions and goals of existing federal campaign finance law, and reviewed the FEC's Advisory Opinions and other actions applying the Federal Election Campaign Act to campaign-related activities online. The paper analyzed the ways in which the Internet merits a different approach and concluded that the mechanical approach of the early FEC actions, if not reversed, would undermine both the goals of campaign finance reform and the Internet's potential to strengthen the democratic process.
After initially taking a very regulatory approach to the Internet, the FEC studied the technology more closely and received input from CDT and others. Based on that input, in 2000-02, the FEC gave greater leeway to individuals to use the Internet for political speech.
In 2002, Congress adopted the Bipartisan Campaign Reform Act (BCRA). Sometimes called McCain-Feingold after its key Senate sponsors, the law was not meant to change the treatment of the Internet under the campaign finance laws. The Federal Election Commission initially ruled that Internet activity was almost entirely exempt from BCRA. However, a court overturned that rule, and in 2005 the FEC began to take a new look at the Internet, with the possibility of adopting regulations limiting online political advocacy.
In January 2000, the Federal Election Commission issued a notice of inquiry on issues raised by the use of the Internet to conduct campaign activity. The Commission was conducting this review in order to assess the applicability of the Federal Election Campaign Act and the Commission's current regulations to campaign activity conducted using this medium.
Organizations from across the political spectrum submitted a joint statement to the Federal Election Commission urging it to refrain from regulating political speech of individuals on the Internet. CDT, the ACLU, People for the American Way and Paul Weyrich's Free Congress Foundation, among others, urge the FEC to:
CDT signed onto this set of comments urging the Commission not to attempt comprehensive rulemaking at this point regarding application of the federal campaign finance law to the Internet. The description of the nature of the Internet in those joint comments served as the basis for a more specific analysis that CDT submitted to the FEC.
The Federal Election Commission on October 3, 2001 issued a Notice of Proposed Rulemaking (NPRM) on the use of the Internet in federal election campaigns. The 2001 rulemaking focused on three areas: First, to clarify the application of the Federal Election Campaign Act (FECA) to campaign-related Internet activity by individuals, the Commission proposed to add a new section to its regulations, stipulating that no contribution or expenditure results where an individual, without receiving compensation, uses computer equipment, software, Internet services or Internet domain name(s) that he or she personally owns to engage in Internet activity for the purpose of influencing any election to federal office. Second, the NPRM also addressed the placement of hyperlinks on corporate and labor organization web sites. Finally it proposed guidelines on the issue of endorsement press releases on corporate and labor organization web sites.
CDT and other groups filed comments on the proposal, urging a hands-off approach to the Internet, but further discussion of the rulemaking was put on hold with the enactment of the 2002 Bipartisan Campaign Reform Act (BCRA).
On March 27, 2002, President Bush signed the Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold law. BCRA addresses many aspects of campaign finance law. The topic of Internet use for campaign purposes was not discussed at length in the law, and in developing implementing regulations, the FEC concluded that the Internet should be completely exempted from BCRA. In 2004, a federal district court in the case of Shays v. FEC held that the FEC could not completely exempt Internet activity from regulation.
In 2004, Congressman Shays (R-CT) and Congressman Meehan (D-MA), two of the sponsors of the Bipartisan Campaign Reform Act, sued the FEC in district court alleging that the Commission did not implement the BCRA as it should have when it completely exempted all Internet communication from oversight by the FEC.
On March 23, 2005, the Federal Election Commission issued a notice of proposed rulemaking ("NPRM"), proposing, among other things, to interpret a key term in BCRA -- "public communication" -- to cover certain Internet content. The FEC was responding to a 2004 district court decision in the case of Shays v. FEC, which held that the FEC could not completely exempt Internet activity from regulation. The 2005 NPRM proposes to treat paid advertisements on sites as regulated "public communications," and as such subject to various limitations, and disclaimer and reporting requirements. Most other political speech by individuals on the Internet will not be covered by the FEC rules.
The NPRM also proposes that unsolicited mail be defined as a "public communication" if such mail is sent to over 500 people using a list purchased from a third party. The FEC has also proposed to leave most "web logs" or "blogs" largely unregulated.
The Internet is fostering an explosion of democratic activity outside the control of the political parties, the traditional media or the moneyed special interests. On the Internet can be found precisely the sort of robust, individual political advocacy that the campaign finance law was intended to promote. In 2000, CDT created this online guide to this diversity - a tutorial and virtual tour for Members and staff of the Commission, Members of Congress, experts, and the public showing how the Internet was being used and why it should be left unregulated. For more recent reports on political use of the Net, see: