Glossary

The new campaign finance rules specifically exempt from regulation "uncompensated Internet activity" by individuals or groups of individuals, whether acting independently or in coordination with a candidate, authorized committee or political party committee. If you only engage in activities included in the exemption, none of your activities are considered contributions, and thus there are no limitations on how much time or effort you can spend on the activity. You don't have to be a campaign volunteer known to a campaign to receive the benefit of the exemption. The term "Internet activities" includes, but is not limited to: "sending or forwarding electronic messages; providing a hyperlink or other direct access to another person's Web site; blogging; creating, maintaining or hosting a Web site; paying a nominal fee for the use of another person's Web site; and any other form of communication distributed over the Internet."

In addition, in most instances, the expenses associated with the equipment and services used to engage in "Internet activities" are not considered "expenditures" under the rules, and thus are also excluded from reporting requirements and other regulation. The rule excludes expenses related to "computers, software, Internet domain names, payments to Internet Service Providers, and any other technology that is used to provide access to or use of the Internet." The explanation accompanying the rule make clear that the rule is intended to be interpreted liberally, and includes handheld communications devices, routers, servers, hosting and e-mail services, as well as future forms of Internet communication.

The rule declaring that "uncompensated Internet activities" (and expenses related to such activities) shall not be considered to be "contributions" subject to any limits is found in the Code of Federal Regulations, at 11 CFR 100.94. The rule declaring that "uncompensated Internet activities" (and expenses related to such activities) shall not be considered to be "expenditures" that must be tracked and reported is at 11 CFR 100.155. Together, these two rules effectively exempt "uncompensated Internet activities" from all of the campaign finance regulations.

The term "public communication" is a key term in the Bipartisan Campaign Reform Act of 2002 (BCRA), which imposed a variety of regulations on public communications such as billboards and broadcast TV ads. The BCRA statute passed by Congress was not clear on whether it applied to communications over the Internet, but that question has been resolved by a court case, and then the Federal Election Commission's 2006 rules addressing Internet communications. The rule applying the "public communication" term to the Internet is found in the Code of Federal Regulations, at 11 CFR 100.26.

In the Internet context, under the new rule, any advertisement or other communication "placed for a fee on another person's Web site" is a "public communication" (and thus is subject to a range of regulations). That includes banner ads, pay per click ads, pop- ups and advertising delivered by e-mail, IM and the like. Any relevant content, including political audio or video content, is a public communication if you pay to place it on someone else's site.

Once you make a public communication, you may be subject to several campaign finance rules. Importantly, there is no threshold payment for a public communications. Even an advertisement that costs $5 or $10 dollars is subject to at least some of the rules. The basic rules that apply to all "public communications" - large or small - are:

First, if your ad specifically calls for the election or defeat of a clearly recognizable candidate or solicits a contribution, you are subject to disclaimer rules that require you to include your name and address in the advertisement. Click here for a discussion of what a "disclaimer" must contain, and some difficult practical issues that are raised by this requirement. Under these rules, you are not permitted to place ads that call for the election or defeat of a candidate on the Internet anonymously.

Second, public communications are also subject to coordination rules. If your public communication is found to be a "coordinated communication," then it must be treated as a contribution to the campaign, subject to federal contribution limits and other rules. The coordination rules are fairly complicated. Before you pay to place a communication on another person's website or blog, you need to understand these rules. This is an area where consulting a lawyer is recommended.

Third, the money you spend to place ads to expressly advocate on the Internet for or against a candidate is treated an expenditure under campaign finance law. If you spend $250 or more on ads, you also have to report the expenditure to the Federal Election Commission pursuant to the law's reporting requirement.

It is important to understand that the online "advertisements" that are covered by the campaign finance laws are "communications placed for a fee on another person's Web site." This definition would not reach nominal payments such as membership fees that allow you to participate in a social networking, blogging, or other conversation site in the first place. Thus, a one-time or moderate monthly fee that enables you to participate in an online discussion should not be viewed as a fee for an advertisement, and thus it would not be regulated as a "public communication." In its exemption for uncompensated Internet activities, the Federal Election Commission makes clear that of "nominal fees" would be included in the exemption.

As defined in the Code of Federal Regulations, at 11 CFR 100.5, a "political committee" under the campaign finance laws includes an association, committee, club or other group of persons that has a major purpose to influence elections and which receieves contributions of $1000 or more in a given calendar year to influence federal elections. Political committees may be authorized by candidates or political parties, or may operate independently.

Unlike uncompensated individuals, political committees operating on the Internet face stringent campaign finance obligations. They must register with the Federal Election Commission (see 11 CFR 102.1) and file detailed reports on their fundraising activities and expenditures (see 11 CFR 104.3). Political committees are required to post "disclaimers" on every public webpage, and on 500 or more "substantially similar" emails that they may distribute (See 11 CFR 110.11).

Because of the exemption for uncompensated Internet activities, a group of online political activists does not become a political committee simply by engaging in election related activities online. The new Internet rules allow groups to be treated the same as individuals and eligible for the same broad exemption from campaign finance obligations for a wide range of uncompensated Internet activities focused on a federal election.

However, if you are part of a group that has already triggered the requirement to register as a political committee based on your offline activities, you should follow the political committee rules for all of your activities on the Internet.

A corporation or labor organization is prohibited from making contributions in connection with a federal election, and from making expenditures for election related communications (except to its "restricted class," which is generally defined for a corporation as its shareholders and senior managers, and for a labor organization its officers and members). The rule also prohibits the use of corporate facilities and resources to "facilitate" contributions, but does not prohibit the use of an office computer by an individual to engage in uncompensated Internet activities, such as blogging, so long as the corporation/union does not direct or control the political activities and the activities do not interfere with the employee's ability to work a normal, full schedule of work.

The rule prohibiting corporations and unions from "facilitating" contribution is found in the Code of Federal Regulations, at 11 CFR 114.4. The rule permitting the use of corporate/union computers and Internet services for "uncompensated Internet activities" is at 11 CFR 114.9.

The campaign finance laws have long exempted "any news story, commentary or editorial" distributed through the facilities of any broadcast station, newspaper, magazine or periodical publication from the campaign finance "contribution" and "expenditure" rules. The new rules make clear that the news media exemption applies to online media to the same extent as media in the offline world by adding "websites" and "other Internet electronic publications" to the list of the types of media covered by the exemption.

Whether a blog or other online site is part of the "news media" depends on several factors. A site cannot take advantage of the media exemption if it is owned or controlled by a political party, political committee or candidate. Further, the entity must be acting in its legitimate press function, which is providing news, commentary and editorials on a regular updated basis. The rulings at the Federal Election Commission on the media exemption and the explanation accompanying the new rule make clear that the rule will be interpreted liberally. News and commentary does not need to be even handed or balanced to qualify for the exemption. Moreover, support or opposition of candidates or solicitation of campaign contributions do not disqualify a blog or other electronic publication from eligibility for the exemption.

Unlike obtaining press credentials at a convention, there is no "application" that one can fill out to be covered by the FEC's media exemption. In most cases, this will not matter, because most bloggers and social networking participants are fully exempt from the campaign finance regulations under the uncompensated Internet activities exemption, whether or not they would also be exempt under the media exemption. If it becomes critical to obtain a formal determination of whether the media exemption applies to a given website (because, for example, significant investments in the website are planned), you can petition the FEC to issue an "Advisory Opinion" making the determination. See, for example, Advisory Opinion 2005-16 for an example of an Advisory Opinion on the media exemption question.

The rule declaring that news media activity (including online media) shall not be considered to be "contributions" is found in the Code of Federal Regulations, at 11 CFR 100.73. The rule declaring that news media activity (including online media) shall not be considered to be "expenditures" that must be tracked and reported is at 11 CFR 100.132. Together, these two rules effectively extend the news media exemption to a broad range of online news and opinion sources.

The coordination rules are one factor in determining when a "public communication" is not considered an independent expenditure, and is treated instead as an in-kind campaign contribution to a federal candidate or political party committee. A finding of coordination may trigger an obligation to report the contribution to the Federal Election Commission, and may put you over federal contribution limits for campaign contributions to a federal candidate or party committee.

The coordination rules are quite complicated. Whether a public communication is considered "coordinated" depends on an analysis of the content of the communication, the timing of the communication, and the conduct of the parties. The Federal Election Commission recently adopted new rules on coordination, but has not yet released any plain language guidance. Click here for the FEC's rulemaking on coordinated communications. These rules, however, have been challenged in a complaint filed in federal court in July 2006.

The federal election laws limit the amounts of money that an individual can contribute to a federal candidate, a party committee or political action committee during an election cycle. The Federal Election Commission's website contains a table listing the current contribution limits.

The campaign finance rules impose, in a variety of situations, requirements that people engaged in political activity must file certain reports with the Federal Election Commission. Because most online activity by individuals will be covered by the uncompensated Internet activities exemption, the reporting requirements are not triggered for most individuals' online speech.

Because paid advertisements online are not covered by the exemption, however, if you place advertisements online you may be required to file reports with the FEC. Under the detailed rule found in the Code of Federal Regulations, at 11 CFR 109.10, people who make $250 or more of "independent expenditures" are required to file reports. Thus, if you purchase more than $250 of online ads that expressly advocate for or against a candidate, you may have to file reports. The uncertainty is that for purposes of calculating expenditures (and thus determining whether you have met the $250 threshold for reports), the rule excludes ads placed on a third party's web site "for a nominal fee." Thus, if you purchase a $5 or $10 ad online, it may not count toward the $250 threshold. The Federal Election Commission has not, however, specified what amount would be considered to be "nominal."

Beyond the requirement to file reports on $250 of more of expenditures, political committees have a separate and more detailed set of reports that they must file, as required at 11 CFR 104.3.

A "disclaimer" is in fact a disclosure statement that under the rules must be included on all "public communications" that expressly advocate for or against any candidate in a federal election. Thus, for example, in a political ad in a newspaper, the disclaimer is the statement that "this ad was paid for by the Joe Smith for Congress Campaign," or if the ad is not paid for by a candidate or authorized committee, the disclaimer must identify who paid for the ad.

Under the disclaimer requirement, you must indicate on an advertisement, "in a clear and conspicuous manner," your name, your permanent street address, phone number or world wide web address, and a statement that the communication is not approved by the candidate. The requirements are very specific, so it is best to review the regulation prior to placing an ad that is subject to the disclaimer requirement. The full disclaimer regulation is found in the Code of Federal Regulations, at 11 CFR 110.11.

On the Internet, disclaimers are required in two main contexts:

(1) any paid advertisement placed on another person's website that either "expressly advocates" for or against a candidate, or solicits any contribution; and

(2) all online public communications and websites of any political committee, as well as certain bulk e-mails by political committees.

The requirement that a disclaimer be placed on online paid advertisements raises a number of serious concerns. First, although the campaign finance laws are generally aimed at regulating the expenditure of large amounts of money, the disclaim requirement applies even for advertisements that cost $5 or $10. In applying the disclaimer requirement to Internet communications, the Federal Election Commission concluded that it lacked the authority from Congress to exclude such low cost ads.

Second, as a practical matter, placing a disclaimer in a small banner ad on the Internet would be very difficult, if not impossible. With text-based ad like Google AdWords, the ads can be no longer than (in Google's case) 95 characters, and a disclaimer would take up the entire ad. Although the rules have exceptions for bumper stickers, skywriting, and other situations where a disclaimer would be impracticable, the Federal Election Commission did not extend those exceptions to exclude online ads.