In just a few months, he warns, bloggers and news organizations could risk the wrath of the federal government if they improperly link to a campaign's Web site. Even forwarding a political candidate's press release to a mailing list, depending on the details, could be punished by fines.
In 2002, the FEC exempted the Internet by a 4-2 vote, but U.S. District Judge Colleen Kollar-Kotelly last fall overturned that decision. "The commission'sof Internet communications from the coordinated communications regulation severely undermines" the campaign finance law's purposes, Kollar-Kotelly wrote.
Smith and the other two Republican commissioners wanted to appeal the Internet-related sections. But because they couldn't get the three Democrats to go along with them, what Smith describes as a "bizarre" regulatory process now is under way.
CNET News.com spoke with Smith about the Bipartisan Campaign Reform Act of 2002, better known as the McCain-Feingold law, and its forthcoming extrusion onto the Internet.
Q: What rules will apply to the Internet that did not before?
A: The commission has generally been hands-off on the Internet. We've said, "If you advertise on the Internet, that's an expenditure of money--much like if you were advertising on television or the newspaper."
The real question is: Would a link to a candidate's page be a problem? If someone sets up a home page and links to their favorite politician, is that a contribution? This is a big deal, if someone has already contributed the legal maximum, or if they're at the disclosure threshold and additional expenditures have to be disclosed under federal law.
Certainly a lot of bloggers are very much out front. Do we give bloggers the press exemption? If we don't give bloggers the press exemption, we have the question of, do we extend this to online-only journals like CNET?
How can the government place a value on a blog that praises some politician?
How do we measure that? Design fees, that sort of thing? The FEC in the late 1990s (in the Leo Smith case) that I don't think we'd hold to today, saying that if you owned a computer, you'd have to calculate what percentage of the computer cost and electricity went to political advocacy.
It seems absurd, but that's what the commission did. And that's the direction Judge Kollar-Kotelly would have us move in. Line drawing is going to be an inherently very difficult task. And then we'll be pushed to go further. Why can this person do it, but not that person?
How about a hyperlink? Is it worth a penny, or a dollar, to a campaign?
I don't know. But I'll tell you this. One thing the commission has argued over, debated, wrestled with, is how to value assistance to a campaign.
Corporations aren't allowed to donate to campaigns. Suppose a corporation devotes 20 minutes of a secretary's time and $30 in postage to sending out letters for an executive. As a result, the campaign raises $35,000. Do we value the violation on the amount of corporate resources actually spent, maybe $40, or the $35,000 actually raised? The commission has usually taken the view that we value it by the amount raised. It's still going to be difficult to value the link, but the value of the link will go up very quickly.
Then what's the real impact of the judge's decision?
The judge's decision is in no way limited to ads. She says that any coordinated activity over the Internet would need to be regulated, as a minimum. The problem with coordinated activity over the Internet is that it will strike, as a minimum, Internet reporting services.
They're exempt from regulation only because of the press exemption. But people have been arguing that the Internet doesn't fit under the press exemption. It becomes a really complex issue that would strike deep into the heart of the Internet and the bloggers who are writing out there today. (Editor's note: federal law limits the press exemption to a "broadcasting station, newspaper, magazine or other periodical publication." )
How do you see this playing out?
There's sensitivity in the commission on this. But remember the commission's the Internet only passed by a 4-2 vote.
This time, we couldn't muster enough votes to appeal the judge's decision. We appealed parts of her decision, but there were only three votes to appeal the Internet part (and we needed four). There seem to be at least three commissioners who like this.
Then this is a partisan issue?
Yes, it is at this time. But I always point out that partisan splits tend to reflect ideology rather than party. I don't think the Democratic commissioners are sitting around saying that the Internet is working to the advantage of the Republicans.
One of the reasons it's a good time to (fix this) now is you don't know who's benefiting. Both the Democrats and Republicans used the Internet very effectively in the last campaign.
What would you like to see happen?
I'd like someone to say that unpaid activity over the Internet is not an expenditure or contribution, or at least activity done by regular Internet journals, to cover sites like CNET, Slate and Salon. Otherwise, it's very likely that the Internet is going to be regulated, and the FEC and Congress will be inundated with e-mails saying, "How dare you do this!"
What happens next?
It's going to be a battle, and if nobody in Congress is willing to stand up and say, "Keep your hands off of this, and we'll change the statute to make it clear," then I think grassroots Internet activity is in danger. The impact would affect e-mail lists, especially if there's any sense that they're done in coordination with the campaign. If I forward something from the campaign to my personal list of several hundred people, which is a great grassroots activity, that's what we're talking about having to look at.
Senators McCain and Feingold have argued that we have to regulate the Internet, that we have to regulate e-mail. They sued us in court over this and they won.
If Congress doesn't change the law, what kind of activities will the FEC have to target?
We're talking about any decision by an individual to put a link (to a political candidate) on their home page, set up a blog, send out mass e-mails, any kind of activity that can be done on the Internet.
Again, blogging could also get us into issues about online journals and non-online journals. Why should CNET get an exemption but not an informal blog? Why should Salon or Slate get an exemption? Should Nytimes.com and Opinionjournal.com get an exemption but not online sites, just because the newspapers have a print edition as well?
Why wouldn't the news exemption cover bloggers and online media?
Because the statute refers to periodicals or broadcast, and it's not clear the Internet is either of those. Second, because there's no standard for being a blogger, anyone can claim to be one, and we're back to the deregulated Internet that the judge objected to. Also I think some of my colleagues on the commission would be uncomfortable with that kind of blanket exemption.
So if you're using text that the campaign sends you, and you're reproducing it on your blog or forwarding it to a mailing list, you could be in trouble?
Yes. In fact, the regulations are very specific that reproducing a campaign's material is a reproduction for purpose of triggering the law. That'll count as an expenditure that counts against campaign finance law.
This is an incredible thicket. If someone else doesn't take action, for instance in Congress, we're running a real possibility of serious Internet regulation. It's going to be bizarre.