Internet CFR Bill on Deck

Posted October 31, 2005 at 6:31pm

The House is set to take up a bill this week that would exempt the Internet from campaign finance laws.

The measure is on the suspension calendar for Wednesday. Bills brought up under the suspension of normal rules have to pass by a two-thirds majority vote and are usually, by their nature, uncontroversial.

Whether the bill, sponsored by Rep. Jeb Hensarling (R-Texas), musters the necessary two-thirds is yet to be determined, but interviews with a range of campaign finance experts reveal that the bill is definitely controversial, despite its seemingly broad bipartisan support.

Even if it were to pass the House, the measure faces uncertain prospects in the Senate. Senate Minority Leader Harry Reid (D-Nev.) has introduced a bill identical to Hensarling’s, and the effort finds philosophical support among many Republicans. Still, the strength of the opposition in that chamber could be enough to derail the effort.

Supporters say the language would remove the freewheeling world of Internet politics from the specter of federal regulations — a politically popular position that is often articulated by Members in both parties. The Federal Election Commission had already made such a pronouncement via regulations to implement the 2002 Bipartisan Campaign Reform Act, but that rulemaking was thrown out along with 14 others by a federal judge for being inconsistent with the intent and letter of BCRA. The district judge was recently backed up by the full D.C. Court of Appeals.

Critics of the bill, including BCRA’s drafters, say the one-sentence legislation is nothing less than a stealth attempt to undermine the entire delicately balanced campaign finance system. It would do this, they argue, by opening a soft-money loophole through which wealthy individuals, corporations and unions could give $1 million worth of political advertising on the Internet to influence a federal race — exactly the kind of activity that BCRA outlawed.

The proxy fight is over the status of bloggers, a handful of whom testified at the FEC earlier this summer about their concern that federal campaign finance law may prevent them from exercising their First Amendment rights.

But even if Congress declines to exempt them entirely with this legislation, the commissioners seemed more than willing to find a way to carve out some middle ground in drafting the regulations, possibly treating paid political ads on the Internet as regulated campaign activity while carving out an exemption for individuals engaged in political activity online and/or expanding the current media exemption to less traditional forms of journalism, a role many bloggers believe they fulfill.

To be sure, ample gray areas remain, such as bloggers working in concert with federal campaigns. Are they then still journalists? What if they are paid for their advocacy? Would incorporated bloggers still be caught up in federal regulations despite the FEC’s intent?

For the most part, however, supporters and opponents of Internet regulation are dividing along traditional boundaries.

The so-called reformers are anxious to see their framework — with its emphasis on discreet roles for donors, interest groups and federal candidates as well as its strict rules on how one can influence the other with money and political favors — carried over into what they see as an extension of the current landscape. Paid ads are paid ads, in their view, yet this bill, they argue, could allow a paid ad advocating a federal candidate on www.nytimes.com to be bought with soft money, unlike one in the print edition of The New York Times. (There is some disagreement on whether such soft-money contributions would be still prohibited under other sections of the law.)

But the debate over whether the FEC should have purview over Internet politics — and if so, how — potentially goes beyond the fairly narrow question of how candidates conduct their campaigns online and how they can raise money. More than other proxy fights in recent years, this one could cut to the heart of how to regulate campaign finance law itself.

Under the current system, television ads cost money, and they are relatively limited in quantity: The more one campaign purchases, the less air time left available for the others, and the more expensive they become. In this system, raising campaign cash has become an arms race of sorts to dominate a medium and drown out one’s opponent.

But what happens to the nature of that regulatory scheme when the medium itself is infinite, the costs of entry are low and the potential to drown out one’s opponents are much more elusive? That is what many supporters of Hensarling’s legislation say the bill is about, a medium that defies any attempt to regulate it.

But there’s a rarely mentioned element here, and telecom observers say there is really no escaping its potential impact.

In a not-so-distant future, the television streaming into American homes may not come over the airwaves or via satellite or cable. It may well be over what is dubbed “Internet protocol” — a medium already gaining popularity as a means for free long-distance service.

Hensarling’s and Reid’s respective bills both exempt from campaign finance law “communications over the Internet.”

But what if the “Internet” means everything Americans see, watch or interact with and provides all of the telecommunications services into nearly every home? Such a change would obviously not take place over night, but slowly every single letter of three-decades’ worth of campaign finance regulation could come to naught in one little exception.

If that were to happen, in the words of one telecom lobbyist, “the exception essentially swallows the rule.”