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[House Report 109-389]
[From the U.S. Government Publishing Office]

109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-389

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                      ONLINE FREEDOM OF SPEECH ACT

                                _______
                                

 March 13, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Ehlers, from the Committee on House Administration, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1606]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on House Administration, to whom was referred 
the bill (H.R. 1606) to amend the Federal Election Campaign Act 
of 1971 to exclude communications over the Internet from the 
definition of public communication, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                       Purpose of the Legislation

    H.R. 1606 would exempt communications made over the 
Internet from the definition of a ``public communication'' in 
the Bipartisan Campaign Reform Act (``BCRA'') (Public Law 107-
155). The purpose of this legislation is to ensure the Internet 
can continue to grow and continue to be a free and positive 
force in our political system. H.R. 1606 would allow bloggers 
and other online activists to express their view on the 
Internet without having to fear they might run afoul of our 
campaign finance laws.

                  Background and Need for Legislation

    After BCRA passed in 2002, the Federal Election Commission 
(``FEC'') was required to develop regulations to implement the 
Act. The Commission determined that Congress did not intend for 
BCRA to cover Internet communications and, therefore, adopted 
regulations that exempted them.
    Congressmen Christopher Shays (R-CT) and Marty Meehan (D-
MA), concerned about this and other post-BCRA regulations 
adopted by the FEC, sued the Commission. The suit argued that 
the FEC regulations did not follow Congress' intent in enacting 
BCRA. Over a year ago, U.S. District Judge Colleen Kollar-
Kotelly agreed with Messrs. Shays and Meehan, and ordered the 
FEC to rewrite many of its rules, including the rule exempting 
Internet communications from regulation.\1\
---------------------------------------------------------------------------
    \1\ Shays v. FEC, 337 F.Supp 2d 28 (2004). Judge Kollar-Kotelly of 
the DC District Court struck down 15 of the 19 regulations challenged 
by Shays and Meehan.
---------------------------------------------------------------------------
    A new FEC rulemaking to cover the Internet began in March 
2005, and the Commission has scheduled a meeting to vote on 
these new rules on March 16, 2006. Unless Congress acts quickly 
to prevent it, the FEC will be required to issue a new 
regulation to cover Internet communications.
    Historically, Congress has regulated political speech only 
where it has the potential to cause corruption or the 
appearance of the corruption. There has been no demonstration 
that the growth of the Internet has had a corruptive influence 
on politics. There is, however, ample evidence that the 
Internet has had a positive, democratizing effect on our 
system.
    The Internet has had a positive influence on our politics 
and engaged thousands of people as never before. It has allowed 
individuals of limited means to become involved in the 
political process because, unlike other forms of media such as 
television and radio, there are few barriers to entry. The 
Internet allows for communication with millions of people for 
little or no cost. Imposing regulations would stifle this 
activity.
    The Internet achieves through technology what BCRA seeks to 
achieve by law. It levels the playing field, empowers ordinary 
citizens, minimizes the influence of wealth and enhances the 
voice of those of lesser means. Imposition of a regulatory 
scheme on this medium will stifle this activity and discourage 
participation, thereby enhancing theinfluence of the wealthy 
and connected, contrary to the stated purpose of our campaign finance 
laws.
    The chilling effect of a regulatory scheme would be 
exacerbated by its arbitrariness--for example, the FEC trying 
to determine on a case-by-case basis which bloggers should be 
considered ``news'' organizations and be granted a media 
exemption and be taken out of the realm of regulated 
organizations, and which should not. This arbitrariness would 
negatively impact bloggers in particular because their sites 
often meld news and advocacy.
    Instead of constantly drawing arbitrary lines and hard to 
follow rules for Internet activists to abide by, the FEC should 
just leave the Internet alone. H.R. 1606 would tell the FEC 
that it was right the first time--the Internet should be left 
alone to flourish and not be burdened by regulation.
    Those who favor regulation, the so-called ``reform 
community,'' believe that Internet speech must be regulated in 
the same manner as all other speech, lest we create a 
``loophole'' that will allow people to evade BCRA. They are not 
deterred by the fact that none of the grim scenarios they 
predict will ensue have been seen in the past four years. The 
2004 election was conducted with the rule H.R. 1606 would 
codify in place, and none of the ill effects predicted were 
seen.
    While there has been no evidence of corruption resulting 
from the Internet exemption there has been ample evidence of 
the positive effects of a deregulated Internet. There was 42% 
growth from 2000 to 2004 in the number of people using the 
Internet to research candidates' issues positions.\2\ About 44% 
of online political activists have not been politically 
involved in the past in typical ways--they have not previously 
worked for a campaign, made a campaign donation or attended a 
campaign event.\3\ Technorati, a popular blog search engine, is 
now tracking 30.4 million blogs and reports that every day, 
70,000 new blogs are created.\4\
---------------------------------------------------------------------------
    \2\ Lee Ranie, Michael Cornfield, and John Horrigan, ``The Internet 
and Campaign 2004,'' Pew Internet and American Life Project, March 6, 
2005 at iv.
    \3\ As of February 2004. See ``Political Influentials Online in the 
2004 Presidential Campaign,'' Institute for Politics, Democracy & the 
Internet, Graduate School of Political Management, George Washington 
University, February 5, 2004 at 5.
    \4\ As of March 13, 2006. See http://www.technorati.com/about/.
---------------------------------------------------------------------------
    H.R. 1606 would make sure bloggers do not have to check 
with a federal agency before they go online. It would protect 
bloggers from being forced to constantly read FEC advisory 
opinions, or to hire federal election lawyers to make sure what 
they are doing is legal. This bill would allow bloggers to 
express their views on politics and politicians without having 
to worry about running afoul of federal election laws.

                       Summary of the Legislation

Section 1.--Short title: the ``Online Freedom of Speech Act''

Section 2.--Modification of definition of public communication

    --Excludes communications made over the Internet from being 
considered ``public communications.''
    Under current law, a regulated ``federal election 
activity'' includes ``public communications,'' such as 
broadcast, cable, satellite, or newspaper communication to the 
general public. In October 2002, the Federal Election 
Commission promulgated regulations to exempt communications 
over the Internet from the definition of ``public 
communications.'' H.R. 1606 would amend federal law to codify 
the current exemption of Internet communications from the 
definition of public communications.

               COMMITTEE CONSIDERATION OF THE LEGISLATION

                       Introduction and Referral

    On April 13, 2005, Mr. Hensarling introduced H.R. 1606, the 
``Online Freedom of Speech Act,'' which was referred to the 
Committee on House Administration.

                                Hearings

    The Committee on House Administration held a hearing on 
H.R. 1606 on September 22, 2005.
    Members present: Mr. Ney, Mr. Ehlers, Ms. Miller, Ms. 
Millender-McDonald, and Ms. Lofgren.
    Witnesses: The Honorable Scott E. Thomas, Chairman, FEC; 
The Honorable Michael E. Toner, Vice Chairman, FEC; The 
Honorable Ellen L. Weintraub, Commissioner, FEC; Michael 
Krempasky, blogger, RedState.org; Duncan Black, blogger, 
Eschaton; Bradley Smith, Professor, Capital University Law 
School; Lawrence Noble, Executive Director, Center for 
Responsive Politics; and Karl Sandstrom, Of Counsel, Perkins 
Coie LLP.

                                 Markup

    On March 9, 2006, the Committee met to mark up H.R. 1606.
    Members Present: Mr. Ehlers, Mr. Mica, Mr. Reynolds, Ms. 
Miller, Ms. Millender-McDonald, Mr. Brady, Ms. Lofgren.
    The Committee favorably reported H.R. 1606, by a voice 
vote, a quorum being present.

             MATTERS REQUIRED UNDER THE RULES OF THE HOUSE

                         Committee Record Votes

    Clause 3(b) of House rule XIII requires the results of each 
record vote on an amendment or motion to report, together with 
the names of those voting for and against, to be printed in the 
committee report.
    The Committee voted to favorably report H.R. 1606. The vote 
to report favorably was approved by a voice vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) rule XIII of the Rules of 
the House of Representatives, the Committee states that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
House of Representatives, are incorporated in the descriptive 
portions of this report.

                General Performance Goals and Objectives

    The Committee states, with respect to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, that 
the goal and objective of H.R. 1606 is to ensure the Internet 
can continue to grow and continue to be a free and positive 
force in the political system. H.R. 1606 will allow bloggers 
and other online activists to express their view on the 
Internet without fear of running afoul of campaign finance 
laws.

                        Constitutional Authority

    In compliance with clause 3(c)(1) of rule XIII, the 
Committee states that Article 1, Section 4 of the U.S. 
Constitution grants Congress the authority to make law 
governing the time, place and manner of holding Federal 
elections.

                            Federal Mandates

    The Committee states, with respect to section 423 of the 
Congressional Budget Act of 1974, that the bill does not 
include any significant federal mandate.

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution to include a committee statement on the extent to 
which the bill or joint resolution is intended to preempt state 
or local law. The Committee states that H.R. 1606 does not 
preempt any state or local law.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, the following estimate and comparison 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 10, 2006.
Hon. Vernon J. Ehlers,
Chairman, Committee on House Administration,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1606, the Online 
Freedom of Speech Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 1606--Online Freedom of Speech Act

    CBO estimates that enacting H.R. 1606 would have no 
significant impact on the federal budget. Enacting the bill 
would not affect direct spending or revenues. H.R. 1606 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and would not 
affect the budgets of state, local, or tribal governments.
    Under the Federal Election Campaign Act, a regulated 
``federal election activity'' includes ``public 
communications,'' such as broadcast, cable, satellite, or 
newspaper communication to the general public. In October 2002, 
the Federal Election Commission promulgated regulations to 
exempt communications over the Internet from the definition of 
``public communications.'' H.R. 1606 would amend federal law to 
codify the current exemption of Internet communications from 
the definition of public communications. Because the 
legislation would not change any current policy or practice, 
CBO estimates that implementing H.R. 1606 would have no 
significant impact on the budget.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                 FEDERAL ELECTION CAMPAIGN ACT OF 1971

      TITLE III--DISCLOSURE OF FEDERAL CAMPAIGN FUNDS DEFINITIONS

    Sec. 301. When used in this Act:
          (1) * * *

           *       *       *       *       *       *       *

          (22) Public communication.--The term ``public 
        communication'' means a communication by means of any 
        broadcast, cable, or satellite communication, 
        newspaper, magazine, outdoor advertising facility, mass 
        mailing, or telephone bank to the general public, or 
        any other form of general public political advertising. 
        Such term shall not include communications over the 
        Internet.

           *       *       *       *       *       *       *

                                  
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