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24–061 2005

HEARING ON POLITICAL SPEECH ON THE 

INTERNET: SHOULD IT BE REGULATED? 

HEARING 

BEFORE THE

COMMITTEE ON HOUSE 

ADMINISTRATION 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED NINTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, SEPTEMBER 22, 2005 

Printed for the use of the Committee on House Administration 

( 

(II) 

COMMITTEE ON HOUSE ADMINISTRATION 

BOB NEY, Chairman 

VERNON J. EHLERS, Michigan 

JOHN L. MICA, Florida 

CANDICE MILLER, Michigan 

JOHN T. DOOLITTLE, California 

THOMAS M. REYNOLDS, New York 

JUANITA MILLENDER-MCDONALD, 

California 

Ranking Minority Member 

ROBERT A. BRADY, Pennsylvania 

ZOE LOFGREN, California 

PROFESSIONAL STAFF

PAUL VINOVICH, Staff Director 

GEORGE SHEVLIN, Minority Staff Director 

(1) 

POLITICAL SPEECH ON THE INTERNET: 

SHOULD IT BE REGULATED? 

THURSDAY, SEPTEMBER 22, 2005 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOUSE ADMINISTRATION, 

Washington, DC. 

The Committee met, pursuant to call, at 9 a.m., in room 1310, 

Longworth House Office Building, Hon. Robert W. Ney (chairman 

of the committee) presiding. 

Present: Representatives Ney, Ehlers, Miller, Millender-McDonald, and Lofgren. 

Staff Present: Paul Vinovich, Staff Director; Karen Christian, 

Counsel; Audrey Perry, Counsel; Samantha Drudge, Staff Assistant; George Shevlin, Minority Staff Director; Tom Hicks, Minority 

Professional Staff Member; and Jannelle Hu, Minority Professional 

Staff Member. 

The CHAIRMAN. The Committee will come to order. 

The Committee is meeting here today to hear testimony on the 

subject of regulation of political speech and activity on the Internet. 

We have a very interesting group of witnesses here today to testify. 

I really look forward to hearing from them. 

This is a very controversial subject—well, everything in this 

building is controversial, but this is horrifically controversial. 

Groups and people really take a stand on it. 

But before we get to our witnesses, I want to provide the general 

public with a little background on the subject so those listening 

know where we are in the process and what could be at stake. The 

Bipartisan Campaign Reform Act, McCain-Feingold, and ShaysMeehan, required the Federal Election Commission to develop regulations to implement this Act. The Commission determined Congress didn’t intend for BCRA to cover Internet communications, 

and therefore adopted regulations that exempted them. 

Two of the Members of the House, pleading that the FEC’s regulations didn’t follow the intent of BCRA, sued the Commission. The 

Court agreed with the Members of Congress and ordered the FEC 

to rewrite the rule. As a result of this lawsuit and court decision, 

the FEC was forced to rewrite the rules that covered communications on the Internet. That new rulemaking began in March of 

2005. 

While this new rulemaking was going on, some Members of Congress made clear that they didn’t intend for BCRA to cover the 

Internet, and they did not want the FEC regulating these communications. 

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In March, our good friend, Congressman Conyers, and 13 of his 

colleagues wrote to the FEC seeking exemption for the Web logs or 

blogs. I would like to include in the record a letter and press release from the gentleman from Michigan. Dated March 11, entitled, 

‘‘Representative Conyers Leads Call on FEC for Campaign Finance 

Exemption for Web Blogs.’’ 

[The information follows:] 

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The CHAIRMAN. Identical bills were also introduced in both bodies to preserve the exemption—in the Senate by minority leader 

Harry Reid, and in the House by Jeb Hensarling. Their bill language was actually adopted by this Committee when we inserted 

it in the Pence-Wynn bill reported by the Committee. 

These bipartisan congressional endorsements with Members from 

both sides of the aisle, in both the House and the Senate, are the 

exception, and shows there are still some issues on which both 

sides of the aisle obviously can agree. 

We will later hear from two witnesses who operate blogs, one 

conservative and one liberal—or if you want to classify yourselves 

a different way, that is fine—but who probably may not agree on 

anything philosophically except they don’t want the FEC to be regulating their businesses or what is said on the Web sites. 

So the debate here today is really not between Republicans and 

Democrats or liberals and conservatives. It is between those who 

favor regulation on this issue and those who don’t. 

A lot of the reform community favor regulation. They believe that 

Internet speech has to be regulated in the same manner as other 

speech or we would create a loophole that would allow people to 

evade the Campaign Finance Reform Act. This prospect doesn’t 

frighten those who oppose regulation. What frightens them is the 

prospect of requiring bloggers to answer to a Federal agency if regulations are extended to cover what they can or cannot say on the 

Web sites. 

So, I think we have a real clash here of two fundamentally different views of the world, one being that regulation is necessary to 

preserve the health of our democracy, and the other that freedom 

from regulation is required for democracy to flourish. With the FEC 

in the midst of a rulemaking on the subject and the Congress considering pending legislation, we have a great opportunity today to 

just air the arguments and where people stand and what they 

think. I really look forward to the testimony. 

I want to thank our Ranking Member, the gentlelady from California; and I would note that we had a wonderful historic event together yesterday with Congressman Fattah, the unveiling of the 

Congressman Rainey portrait, who was the first seated African 

American elected and seated in the House. We had a great ceremony, and the Rainey family actually met each other and were 

present. Some of them had not ever met each other. It was a great 

day with our Ranking Member; and, as usual, we appreciate her 

interest in legislation. 

Ms. MILLENDER-MCDONALD. Thank you so much, Mr. Chairman, 

for your continuing to bring people together as you did the Rainey 

family yesterday. I was amazed that many of them had not met 

each other, and so they came to meet each other yesterday at that 

great event put on by our colleague from Pennsylvania, Congressman Fattah. 

Regretfully, because this is the annual legislative conference of 

the Congressional Black Caucus Foundation, I am going to have to 

leave after I give my opening statement; and I regret that. But 

then I have a group of young 11-year-olds, 11- and 12-year-olds 

who will be doing demonstration flying with the military and— 

through Boeing, and so I have got to get out to this flying field 

6 

wherever I am flying to. I have been flying all morning, but I do 

want to thank the chairman for scheduling this oversight hearing, 

and my leaving is not because of a disinterest, but it is because of 

the multiple schedule that I have today. 

Being from California, I have seen firsthand how the Internet 

has become an innovative and powerful medium. A little more than 

a decade ago, when public use of the Internet was still in its infancy, people around the world were just beginning to use this new 

technology to instantaneously communicate with one another. 

Today, the Internet has grown into a powerful tool for commerce, 

information, and the media. 

Looking back on this last Presidential election cycle, some of the 

positive consequences of enacting the Bipartisan Campaign Reform 

Act, or BCRA, were the democratization of grassroots involvement 

in this process and broadening of political free speech and the 

grassroots efforts to increase voter turnout, all of which were facilitated or made possible by the use of the Internet. Federal officeholders and their political parties were forced to appeal to a broader audience of small donors, and the Internet was tapped for that 

purpose. 

The Internet was also used by Federal candidates to get their 

message out and to become more involved in grassroots activities. 

Presidential candidates used the Internet to raise substantial 

amounts of money. Internet fundraising is much more efficient and 

much more—less costly than conventional outreach such as hiring 

phone banks, producing and airing TV ads and sending out mass 

mailers. All of the resources raised by the campaign is fully reported to the Federal Election Commission and publicly disclosed. 

Millions of small, first-time donors recently became involved with 

the political process by using the Internet. Americans were not only 

able to contribute to candidates using the Internet, but they were 

also able to learn about the candidate’s position on issues when 

they arose and not wait for a news cycle. The Internet is leveling 

the playing field between everyday Americans and big donors and 

between the candidates and the news media which covers them. 

Hurricane Katrina destroyed the Gulf Coast, flooded 80 percent 

of the City of New Orleans, and caused the worst disaster in this 

nation’s history. The Internet helped to raise millions of dollars in 

relief for the Red Cross and other relief organizations; and, as a result, the first beleaguered evacuees might be able to return to their 

city and their homes. 

But for every legitimate charity working miracles, there are 

hucksters and scam artists trading on America’s generosity and 

community spirit; and this is an issue I want to raise with our witnesses today, or I will raise it later on. 

As I stated earlier, the Internet facilitated the participation of 

millions of new low-dollar political contributors. This was a remarkable and extraordinarily positive development. Regretfully 

and inevitably, as complaints to the FEC have disclosed, a few 

criminals took advantage of the enthusiasm of ordinary citizens to 

participate in our democracy and stole their contributions through 

phony political Web sites. These sites, by mirroring legitimate candidate sites, were able to deceive an unknown number of people. 

7 

Unless addressed, this type of crime stands to undermine the 

confidence of people who would otherwise be willing to use the 

Internet to contribute to the candidates and parties of their choice. 

The Commission’s normal enforcement procedures are not designed to respond in a timely manner to such crimes. Therefore, I 

would urge the Commission to develop procedures and to work 

with the private sector, the political committee, and other governmental agencies to address this problem and this type of fraud. I 

would be interested in hearing from you in addressing this very 

critical and serious issue. 

Mr. Chairman, thank you again for this hearing. Don’t think that 

you are alone because there are—no other members will be on your 

side. But we do recognize the importance and the seriousness of 

this issue. 

Thank you. 

The CHAIRMAN. I thank the Ranking Member, the gentlelady 

from California, for also readjusting your schedule. You are not actually going to fly a plane, are you? 

Ms. MILLENDER-MCDONALD. Heavens, no. 

The CHAIRMAN. I wanted to make sure. Thank you, and I think 

it is important to have the hearing for the record. Of course, the 

record will be open for follow-up questions, so I want to thank you 

so much for your support. 

We will start with the first panel today. We are fortunate today 

to have with us three distinguished commissioners from the Federal Election Commission who discussed their ideas and proposals 

regarding the regulation of political speech on the Internet. 

First, we will hear from Chairman Scott Thomas, followed by 

Vice-Chairman Michael Toner and, finally, Commissioner Ellen 

Weintraub. 

We look forward to your remarks. Welcome all three commissioners today. 

STATEMENTS OF SCOTT E. THOMAS, CHAIRMAN, FEDERAL 

ELECTION COMMISSION; MICHAEL E. TONER, VICE CHAIRMAN, FEDERAL ELECTION; AND ELLEN L. WEINTRAUB, COMMISSIONER, FEDERAL ELECTION COMMISSION 

The CHAIRMAN. We will hear from the Chairman first. 

STATEMENT OF SCOTT E. THOMAS 

Mr. THOMAS. Chairman Ney, Ranking Member Millender-McDonald and members of the committee, thank you for inviting me and 

my colleagues to testify on the proper reach of any regulation of 

campaign activity on the Internet. I plan to read just a few 

snippets of my prepared statement, and I would ask that the full 

statement be entered for the record. 

I hope here to make a few basic points. 

I would add—since the ranking member does have to leave, I 

would just jump outside of my prepared remarks to indicate I think 

there are some interesting opportunities to work with the private 

sector to help develop seals of approval, if you will, that indicate 

a particular Web site is an official Web site. So I would be very 

happy to sort of explore along with your staff and your office ideas 

along those lines. 

8 

There is actually a group that I know of that is working on that. 

It is called Election Mall Technologies, and they have started to develop and work with States to develop, in essence, an official seal 

of approval so people know that a particular Web site is the real 

deal. 

Ms. MILLENDER-MCDONALD. That is encouraging. Thank you so 

much. 

Mr. THOMAS. Now back to where I was initially leading. 

I hope to make a few basic points. 

First of all, the Commission’s 2002 regulations, in my view, mistakenly adopted a total carveout for Internet communications that 

exempts from core statutory provisions even paid campaign advertising. 

Second, there are ways for the Commission to rectify the situation by regulating only Internet activity that raises the concerns 

underlying the core statutory provisions while leaving the vast majority of the Internet activity, including blogging, uninhibited. 

Third, Congress I think should await the Commission’s effort and 

should not compound the current problem with enactment of the 

same total carveout approach. 

Now, as the Chairman referenced, the Commission is in the 

midst of a rulemaking concerning the proper reach of regulation regarding political activity on the Internet. We have put out a notice 

of proposed rulemaking with several options. This summer we had 

a couple days of hearings, and we hope to be able to adopt final 

rules on this topic by the end of the year. 

The regulations adopted by the Commission in 2002 created a 

very broad exemption from several statutory restrictions for Internet activity. It is similar to the exemption adopted by this committee when considering the Pence-Wynn bill, and the Commission 

has been in litigation over this broad exemption since October of 

2002. 

The broad exemption the Commission adopted leaves serious 

gaps in the statutory system put in place by Congress to require 

hard money funding of State or local party communications supporting particular Federal candidates and to limit or prevent certain contributions on behalf of Federal candidates and committees 

and to require disclaimers on political advertising. 

Experience teaches that political professionals will exploit any 

perceived loopholes. For example, the national party soft money 

loophole started as a minor blip in the 1980s and exploded to a half 

billion dollar binge by the 2000 election cycle. Internet advertising 

and e-mail sent to millions are themselves showing signs of growing in terms of usage and costs. 

I would interject here we had a witness testify, Mr. Michael 

Bassick. He is with the Online Coalition, and he told us in 2004 

alone over $14 million in Internet campaign advertising was purchased. He said this represented a 3,000 percent increase over the 

amount of paid Internet advertising from the 2000 cycle. 

So we have a growing development in terms of paid Internet advertising, and I would suggest that carefully crafted regulation on 

this topic is in order. 

I won’t belabor with you the details of the legal problems with 

the Commission’s approach except to note that really there is only 

9 

one provision in the statute that defines the term public communication and uses it; and it is a provision that is designed to require State and local party committees to use hard money to pay 

for certain public communications that promote, support, attack or 

oppose a Federal candidate. That is where the Commission adopted 

this broad, across-the-board exemption for, in essence, any Internet 

activity. This arguably leaves State and local parties free to fund 

hard-hitting, candidate-specific attack ads placed for a fee on popular Internet Web sites, no matter the cost, as some sort of allocable expense that can be paid for, in large part, with soft money. 

Second, when later crafting new regulations specifying when coordinating a paid communication with a candidate or committee 

makes the communication an in-kind contribution, the Commission 

unnecessarily adopted a content requirement which, in turn, adopts 

that restricted public communication definition and thereby excludes all communications over the Internet. This leaves corporations or unions or foreign governments and wealthy individuals 

free to fund, without regard to the statutory limits and prohibitions, Internet communications of any sort in full coordination with 

Federal candidates and committees. 

Imagine a huge cooperation or union being able to fully fund the 

Internet ad campaign or million person e-mail operations of a cooperating Presidential or congressional or party committee. 

Now, the third mistake, in my view, of the Commission came 

when drafting the post-BCRA regulations dealing with disclaimers. 

Though the statute requires notice identifying the payor and indicating whether or not there is candidate authorization on any type 

of general public political advertising, the Commission again adopted its restricted public communication definition and thereby excluded communications over the Internet. The result is that candidates, party committees and other persons who pay for Internet 

campaign ads on popular Web sites do not have to follow statutory 

disclaimer rules. 

In sum, as a result of the decisions made by the Commission in 

the rulemaking process, party committees will be using soft money 

to pay for Internet ads bashing candidates; corporations, unions, 

foreign nationals and wealthy individuals will be paying for Internet-related expenses of requesting candidates and parties; and the 

public won’t have a clue who is paying for virtually all Internet advertising they will see. 

I would say this is not inconsequential or hypothetical. A search 

of the FEC database shows about $25 million on Schedule B disbursement schedules which describe with terms like Web or Internet or e-mail—$25 million. And that is just really what we can see 

because people have happened to label those kinds of activities that 

way. So there is a fair amount of activity out there. 

The invalidated regulations of the Commission would essentially 

gloss over this significant financial activity and the potential for 

soft money and other otherwise restricted sources being used to 

pay for it. 

So we are in the process of this rulemaking. I think we are working pretty well to try to correct the problem that I have identified. 

The focus of any Internet regulation should be those Internet 

campaign ads placed on Web sites that normally charge a commerVerDate Aug 31 2005 09:09 Oct 28, 2005 Jkt 024061 PO 00000 Frm 00011 Fmt 6633 Sfmt 6602 E:\HR\OC\A061.XXX A061
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cial fee for such placement. That is the focus of the Commission’s 

proposed regulation that we put out. 

For ads placed for a fee on another person’s Web site, State and 

local parties would have to follow the funding restrictions intended 

for public communications in the statute; all persons who coordinate such ads with a candidate or party would have to treat them 

as contributions or coordinated expenditures; and, third, disclaimers saying who paid for them and whether they were authorized by a candidate would have to be included, unless it was otherwise impractical. 

Importantly, under the Commission’s proposed rules, no other 

Internet communication would be regulated as a public communication. Thus, State and local parties would not have to apply the 

new BCRA soft money prohibition to material placed on their own 

Web sites or to e-mail activity. Likewise, persons coordinating with 

candidates or parties regarding material placed on such persons’ 

own Web sites would not have to worry about triggering the coordinated communication rules. 

With regard to disclaimers for persons other than political committees, the Commission’s proposed rules would not require a disclaimer under any circumstances if the communication did not include express advocacy or solicitation of Federal contributions. Beyond that, other than for paid ads placed on someone else’s Web 

site, the proposal would only require a disclaimer on e-mail sent to 

more than 500 recipients if the sender paid for a mailing list to accomplish that mailing. Thus, for material placed on one’s own Web 

site and for e-mail that is sent to 500 or fewer persons or to a list 

developed without having to purchase the names, there is no disclaimer requirement. 

Taken as a whole, the Commission’s proposed regulations already described move toward a reasonable balance. They get at the 

heart of the problem noted by the court in Shays v. FEC and at 

the same time leave wide latitude for individuals, bloggers and others to undertake Internet political activity. 

I would say to further assure that vast array of individuals who 

use the Internet for political speech that the Commission intends 

to leave individuals free to operate outside the relatively few constraints noted above, the Notice of Proposed Rulemaking suggested 

several revisions to other regulations. For example, we clarified 

that we would expand the so-called volunteer activity allowance to 

independent activity, not just coordinated activity. 

This is important because, heretofore, the Commission has felt 

compelled to treat noncoordinated or independent activity on the 

Internet as something that is still subject to the current regulations on independent expenditures. So at some point a person 

would be subjected to the rule that only hard money can be used 

to pay for independent express advocacy communications and at a 

$250 threshold a person has to start reporting independent expenditures. So our intent with this rulemaking is to clarify that we will 

work with the volunteer allowance that is in the statute and make 

it extend to independent activity so that independent Internet activity likewise will have freedom from the independent expenditure 

restrictions. 

11 

We also put in some provisions to clarify that our current rules 

on allowing an individual to use the employer’s facilities will extend to use of computer facilities and Internet facilities at the 

workplace. 

We also put in some rules to clarify that we intend to apply the 

existing media exemption to Internet activity. 

So we hope those additional proposed revisions would assure the 

regulated community that our focus is only on these paid ads 

placed on someone other’s Web site. 

We received over 800 comments. As I said, we held 2 days of 

hearings, and we are right now going over the voluminous record 

and trying to come toward a resolution on that particular rulemaking. 

In closing, I would just urge that the committee not adopt the approach that the committee approved in June, just because it will 

fall into the same set of problems that I described when we went 

through the regulation process. That broad exemption, at least in 

my mind, does not work well. 

I would just finish by saying the Internet, we all understand, is 

a wonderful tool for political activity. Its accessibility and generally 

low cost are invigorating the body politic. By the same token, its 

increased usage by candidates and parties and the increased resources being put into this technology for campaign advertising 

suggests a need to be cautious about attempts to exempt all Internet activity from Federal campaign finance laws. I hope Congress 

can await the outcome of the Commission’s regulation proceeding. 

I thank the chairman and the ranking member and the members 

of this committee for the opportunity to testify, and I assure you 

the Commission stands ready to assist the committee further in 

any way it would find helpful. 

The CHAIRMAN. Thank you. 

[The statement of Mr. Thomas follows:] 

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The CHAIRMAN. Vice Chairman Michael Toner. 

STATEMENT OF MICHAEL E. TONER 

Mr. TONER. Thank you, Mr. Chairman. I want to thank you and 

the ranking member and all members of the committee for inviting 

me to testify here today on Internet regulation. 

I want to emphasize three things today: 

First, there is no indication that Congress intended for the many 

prohibitions and restrictions within the McCain-Feingold law to 

apply to the Internet. As I detail in my written testimony, the 

Internet is not subject to McCain-Feingold under the plain meaning of the statute. 

Congress identified a large number of mass media that are subject to McCain-Feingold restrictions, including broadcast, cable and 

satellite communications, newspapers, magazines, mass mailings, 

telephone banks. Even outdoor advertising facilities are mentioned 

in this statute. Virtually every type of mass media in this country 

was identified by Congress in this key statutory provision except 

for one, the Internet. 

I do not believe that the statutory omission was an accident or 

an oversight. Rather, I believe it was a conscious, informed judgment by Congress that the World Wide Web should not be subject 

to the many restrictions and prohibitions that McCain-Feingold applies to other types of mass communications. 

There is also no evidence in the legislative history that Congress 

intended to restrict online politics when it enacted the McCainFeingold law. To my knowledge, during the lengthy floor debates 

on this legislation not a single Member of Congress, including the 

legislation’s sponsors, indicated that the Internet would be restricted or regulated in any way in the McCain-Feingold law. 

Given that such a result would potentially affect the activities of 

millions of online political activists, the fact that there was no floor 

discussion of the subject is powerful evidence, in my view, that 

Congress did not intend to restrict the Internet when it passed the 

McCain-Feingold legislation. So, given the plain meaning of the 

statute and its legislative history, in my view the FEC was correct 

to exempt the Internet from its regulations implementing the 

McCain-Feingold law. 

Second, there are very strong policy reasons that support in my 

mind exempting online political speech from government regulation 

and restriction. As many commentators have noted, the Internet is 

virtually a limitless resource where millions of Americans communicate every day at virtually no cost. Unlike television and other 

traditional media, which generally are scarce and have significant 

financial barriers to entry, an individual can communicate with 

millions of people online at little or no cost in an interactive and 

dynamic manner; and the speech of one person does not and cannot 

interfere with the speech of anyone else. 

Published reports indicate that, as of August, 2005, there were 

over 14 million Web blogs and over 1.13 billion links in cyberspace, 

that approximately 80,000 new blogs are created every day, which 

works out to about one every second, that the blogosphere continues to double about every five and a half months, that approximately 70 million American adults log on the Internet every day 

23 

and that Americans send out approximately 43 million e-mail messages per day. In light of this, it is simply not possible, in my view, 

for any person or entity, no matter how wealthy they may be or 

how much money they can spend, to dominate political discourse 

on the Internet. 

By contrast, if a multi-millionaire decides to spend millions of 

dollars on television or radio advertising to try to elect or defeat 

a Federal candidate, that person could buy up much of the available advertising time and could make it difficult for anyone else to 

be heard on those traditional media. But such dominance, in my 

view, is not possible on the Internet, given its extraordinary size 

and accessibility. 

Third, there is no constitutional basis, in my view, for the Federal Government to restrict online politics. The primary constitutional basis for campaign finance regulation is preventing corruption or the appearance of corruption. Where campaign finance regulations meant to ensure that money and politics does not corrupt 

candidates or officeholders or create the appearance of corruption, 

such rationales cannot plausibly be applied to the Internet, given 

its size, affordability and accessibility. 

As bloggers Markos Moulitsas Zuniga and Duncan Black pointed 

out to the FEC earlier this year, the purpose of campaign finance 

law is to blunt the impact of accumulated wealth on the political 

process, but this is not something that occurs online. While wealth 

allows a campaign or large donor to dominate the available space 

on TV or in print, there is no mechanism on the Internet by which 

entities can use wealth or organizational strength to crowd out or 

silence other speakers. In sum, the Internet fulfills through technology what campaign finance reform attempts through law. 

On the broadest level, the question to be decided in the months 

ahead is whether the online political speech of every American will 

be free. I ask, must every aspect of American politics be regulated 

by the Federal Election Commission? Can there not be any part of 

our politics that is not subject to Government review, investigation 

and potential enforcement action? I don’t view these as rhetorical 

questions. I view them as going to the heart of the debate of whether the Internet should be regulated by the Federal Election Commission. 

I remain hopeful that Congress and the Commission will take 

whatever steps are necessary to ensure that every American can 

engage in online politics free of Government regulation and restriction. 

I want to thank again the committee for inviting me to testify. 

I look forward to the committee’s questions. 

[The statement of Mr. Toner follows:] 

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The CHAIRMAN. Commissioner Weintraub. 

STATEMENT OF ELLEN L. WEINTRAUB 

Ms. WEINTRAUB. Mr. Chairman, Representative Miller, it is a 

pleasure to be here. You have my written statement. I ask that it 

be entered into the record. I won’t read it to you. 

Let me say at the outset that I got to the Commission after most 

of the rulemakings that were necessitated by BCRA had already 

been completed; and, as you have already heard and I think will 

continue to hear today, a lot of people who were involved in that 

process—at the Commission and on the outside as commentors feel 

very strongly about those regulations, whether they were right, 

whether they were wrong. 

I wasn’t there, and I don’t have a dog in that fight, and I am not 

here to relitigate that. I am also not here to lobby you over whether 

you should or should not pass a law governing the Internet and 

politics. But I am here to talk to you about where the Commission 

finds itself today. 

And where we are today is a place where, without congressional 

action, the Commission has no choice. We are under a judicial 

mandate to issue a regulation addressing at least some aspects of 

political speech on the Internet. Barring statutory change, that is 

exactly what we will do, although I believe the Commission should 

and will take a very restrained approach to any such regulation. 

But if you don’t want us to issue that regulation, then we need a 

change in the law. 

I think that, I want to assure you that we are, as a group, and 

I know I am personally, committed to taking a very restrained approach to any regulation that we pass that governs people’s use of 

the Internet. We are not interested in creating a new category of 

Internet outlaws. I am not interested in having anyone out there 

sitting at their computer, whether it is at their home or their office, 

about to send out a message and thinking, well, before I press that 

send button do I have to call my lawyer or, God forbid, read an 

FEC advisory opinion? I think that would be a very bad result, and 

we will do everything within our power—I will do everything within my power to make sure that is not the result of our regulations. 

In our proposed regulation, the only Internet activity that we 

propose to cover as a regulated public communication is an advertisement that is placed for a fee on another person’s Web site; and 

we tailored that on purpose to be as narrow as we thought we 

could while still complying with the judge’s concerns. 

Now I will point out that we received some testimony during our 

hearing that Internet ads can be placed very cheaply, as cheaply 

as $50 for 50,000 hits on some sites, according to the Center For 

Democracy and Technology; and it has been suggested to us that 

there perhaps ought to be some kind of a minimum threshold before we would look at even paid advertising. The threshold that has 

been suggested by several witnesses is $25,000. That might be a 

perfectly good idea, but I don’t think we can do that, again, without 

a statutory change. So I will just suggest that to you that if you 

are interested in that approach, that is another area where we 

would need to see legislation. 

33 

Our proposed regulation also addressed disclaimers on e-mail, 

only because we have a regulation on the books that I believe is 

vastly overbroad, and I think we need to pare that down. 

Right now, if an individual sends out 500 substantially similar 

unsolicited e-mails that advocate the election or defeat of a candidate, it requires a disclaimer. And when I think about how many 

addresses people routinely keep in their e-mail address books—I 

know I have over 500—people belong to listserv groups that have 

many, many names on them; and it is very, very easy, I think, for 

someone who is involved and excited about politics to, when it gets 

close to the election, decide to send out an e-mail to everybody in 

their address book, which could very well be over 500 names, saying please vote for my favorite candidate or vote against this other 

guy. 

For us to say that that would require a disclaimer or that the 

Federal Government has any interest in regulating that kind of email I think is ridiculous. So I think we need to change the regulation on the books. 

The proposal we have made is to import a commercial transaction requirement onto that so, unless the individual had paid for 

their mailing list, which most individuals wouldn’t do, they would 

not have to worry about that disclaimer requirement. But it has 

been suggested that that is not enough, and I am still contemplating, and I am looking at this issue. 

I think that it is quite possible that we might want to repeal that 

entire disclaimer regulation as it applies to e-mail except insofar as 

it would govern political committees, candidate committees, party 

committees, all political committees so that individuals would 

never have to be concerned about that, no matter the source of 

their address lists. 

The proposal also makes clear a couple of things that I think are 

already true, but perhaps, given all the attention to this, people 

using the Internet would feel more comforted by seeing it in writing—maybe not—and that is that the media exemption does apply 

online. Online publications are given the same protection that 

paper publications are and that the volunteer exception that is in 

our rules does cover individuals’ use of computers in their own residences, on their own equipment, or on publicly available equipment 

such as in libraries or, in many instances, on corporate or labor 

union equipment that they otherwise have access to that they are 

free to use under the terms of their employment or the relationship 

with their union for nonbusiness purposes. 

A lot of people are concerned that the way our regulations are 

written, this would limit individuals’ use of those kinds of computers to 4 hours a month, which isn’t a lot of time. No witness 

could come up with any reason why we would want to import that 

kind of restriction, and I don’t see any reason to do so. So I am also 

looking at whether our rules are already clear enough on that, that 

this 4-hour limit wouldn’t apply or whether we need to specifically 

broaden them. 

But the argument has also been made that perhaps we don’t 

want to even go so far as to address the Internet in this context. 

Because even by virtue of exempting activity, we impliedly say that 

34 

they are under our jurisdiction; and that is a debate that is ongoing 

at the Commission as well as outside. 

Let me say couple of words about bloggers, because the bloggers 

have generated and received a lot of attention in this debate. 

No one wants to regulate the bloggers. I think that is pretty clear 

now. But some commentors pointed out that blogging is only one 

form of communication technology that currently millions of people 

use, but there are many other ways that people use the Internet 

to communicate. And when we—if we are going to craft an exemption, we ought to make it broad enough that it is not limited to just 

a technology that happens to be popular today but also have it 

broad enough that it would cover the way people will continue to 

use the Internet next year and the year after that, or the way 

things change online, tomorrow and the day after that. So I think 

we want to be technology neutral in our approach, and an exemption for bloggers would probably not be broad enough. 

In addition, some of the bloggers have asked that they be allowed 

to incorporate for liability purposes the way political committees 

can without incurring all the corporate restrictions. I think that is 

an excellent idea. I would be happy to pursue that. I am not sure 

we can do that in the context of this rulemaking, given the requirements of the administrative procedure act for noticing what we do. 

The courts have been very strict with us on those requirements, 

and I think we might have to notice that in a new rulemaking, but 

I am very interested in pursuing that because I see no reason not 

to do it. 

One other issue that has come up with bloggers, in the last election a couple of bloggers received payments from candidates, and 

that became controversial, and some people have suggested that 

those payments should be disclosed by the bloggers themselves. 

However, we do not normally require disclosure by commentators 

of payments they receive by campaigns. It is usually the campaigns 

that disclose those payments. And I don’t think that we—for myself, I personally would not support a rule that imposed a new requirement for people who comment on the Internet that does not 

otherwise exist for people who comment on television or newspapers or in any other forum. 

One other sort of technical point on the republication of campaign materials, which is generally covered under the law and is 

regulated. On the Internet, it takes on a whole different character 

because it requires virtually no cost or effort to cut and paste something or to add a link or to forward something that you have received from another source online. It is very different in character 

than Xeroxing a bunch of papers and then stuffing them in envelopes and folding them and addressing them and stamping them 

and buying the stamps. There is a lot of effort that goes into that, 

and it just doesn’t track what happens on the Internet. 

So I think we ought to make clear that whatever our rules are 

in other contexts for republishing campaign materials that they 

would not apply in the same way to linking and forwarding and 

cutting and pasting online. 

I think we can all agree that the Internet is a potent and dynamic tool for fostering political debate and that any regulation we 

undertake should proceed on a ‘‘less is more’’ theory. We need to 

35 

be very narrow and focused and restrained, and I am committed 

to doing it that way. The Internet brings people together who can’t 

leave their house and or who live in faraway places and provides 

them with a forum where they can get together and talk about the 

future of our Nation, and who would want to interfere with that? 

I know I don’t. 

I thank you for your attention. I am happy to answer any questions. 

The CHAIRMAN. Thank you. 

[The statement of Ms. Weintraub follows:] 

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The CHAIRMAN. I have a couple of questions now. I want to move 

on to both members who are here to ask questions and come back 

and still have some left. 

We will start with you, Commissioner Weintraub, and maybe 

someone else can answer. What is the difference between a blogger 

or a web site or what the courts said you ought to regulate? I know 

that the authors of BCRA when asked the question, both House 

and Senate, do you support regulating bloggers, said no. But they 

obviously sued the FEC to have regulation. 

Ms. WEINTRAUB. General public political advertising. And I think 

what this debate concerns is what is advertising? What we have— 

the way we have proposed to do it in our rules is that we would 

only cover ads that are placed for a fee on somebody else’s Web 

site, which would not be the case for bloggers sitting at their computers and sending out their own opinions. But, you know, it could 

be defined in a more capacious way. I don’t think we have any intention of doing so. 

The CHAIRMAN. The question eventually somebody is going to 

have to try to answer, because—well, I will let the other two gentlemen comment. 

Mr. TONER. Thank you, Mr. Chairman; and I think Commissioner Weintraub is absolutely right. That was sort of the key statutory phrase that the court drew upon. But I have to note that the 

court decision is not in any way limited to paid advertising. In fact, 

nowhere in that decision is there any suggestion that if the FEC 

takes care of paid advertising it is in good shape. 

The CHAIRMAN. So what did the court tell you you have to do? 

Mr. TONER. It validated the blanket exemption for the Internet 

and said you have got to regulate at least some aspects of it in 

some way. 

The CHAIRMAN. So this is pretty wide open as to what you can 

get restricted or not. 

Mr. TONER. Right. It is always hard to know how these courts 

are going to react, but there is a real possibility of additional litigation, even if regulations along these lines are adopted. 

But the other point I wanted to make—and I think there is no 

question that the Commission’s proposals are very restrained as 

compared to others that could have been made, and I think that 

was a very healthy development. But, you know, as my written testimony indicates, I do think there would be a number of complexities, even under a narrowly tailored regulation. 

But my bigger point here is that it is the exercise of jurisdiction 

in the first place that, in my view, would be problematic. Because 

if the history of campaign finance legislation is repeated in the future, the regulation of today will lead to broader regulation tomorrow. We have seen it over and over in different areas of the law. 

And if the Congress believes that the Internet is of a different nature than other mass media, doesn’t have the same potential for 

corruption because of its accessibility, its affordability, its breadth, 

this is the opportunity to stand firm on that and make clear there 

will be no regulation of this medium. 

Mr. THOMAS. Mr. Chairman, thank you. 

I would just note a couple things. As I read the court decision, 

when it got around to the Internet exception it was dealing with 

40 

that part of the public communication definition that ends with the 

phrase ‘‘any other form of general public political advertising.’’ and 

in so many words the Court said, I leave it to the Federal Election 

Commission to properly interpret what Internet activity fits within 

the confines of that phrase, ‘‘any other form of general public political advertising.’’ so that is why we are focusing on this paid advertising prong. 

With regard to blogs, I have to also mention when we were doing 

the hearings we had lots of folks come through; and the fellow who 

has set up Daily Kos, which is a very popular Web site these days, 

was in a conversation with another witness who you will be hearing from today, Larry Noble; and they were going back and forth. 

But I gathered that Daily Kos, which is a blog, they post comments 

and responses to comments, and they go on and on quite a bit, and 

they cover lots of topics, but they also, apparently, accept advertising. So you are starting to see a bit of a blend, where some of 

the blogs are making a go of it commercially by offering up advertising. 

You should inquire, I guess, from Mr. Noble. My recollection is 

that he was talking about how he had discovered that Daily Kos 

was offering advertising over a certain length of time for $50,000. 

So we are starting to see some opportunities for advertising on 

the Internet and even on blogs that might turn out to be fairly expensive. So that is kind of—the focus of our proposal is really just 

on those paid ads, at least at this time. 

Ms. WEINTRAUB. Could I add, Mr. Chairman, that, to the extent 

that we are looking at paid ads, it would—even if an ad is placed 

on a blog, the restriction in the proposed regulation would only govern the ad. It wouldn’t govern the entire blog. 

The CHAIRMAN. I ask this question: I know that there are people 

out there that have formed groups, and you think they are 527, 

and you find out they are nonprofit or 501(c)(3) and then they go 

after candidates and have press conferences in the states. They 

bring up—they get one citizen, and they say, this is the committee 

against so-and-so. Then you see them on a blog all of a sudden, and 

they are out there blogging. So do they become an individual 

blogger that shouldn’t be regulated? 

But this is someone—you can see the track, and people put 

money into advertisement on her blog. But she is a private citizen, 

so we don’t touch her. Yet we know she has done press conferences. 

She has been here. She took money, 527 money. 

So, this is what kind of baffles you. How would you ever determine, you know—well, you go after them if you saw that they did 

a press conference for political activity and the money came in for 

an advertisement, but you don’t go after them if they are just 

bloggers? I don’t know the answer. That is why I asked you about 

them, a blog versus a web site. 

Mr. THOMAS. Well, briefly, I would note you struck on one of the 

many complexities in this area. 

The CHAIRMAN. I gave you a real live case, too, that I have personal knowledge about. 

Mr. THOMAS. Many members have lived through the experience 

of dealing with blogging operations that are fired up and active and 

usually going after the member in question, and it is a tough one. 

41 

We have exemptions in the law, however, for individual volunteer activity. If you really are acting as an individual and you are 

basically doing activity on your noncompensated time, we think 

there are ways that should be used to exempt whatever those people do using their own computer and so on. So if you set up a blog, 

a Web site using your home computer, do it inexpensively, that is 

fine. 

What we are trying to focus on are situations where maybe someone does, in fact, pay for advertising on a Web site of some sort. 

It might be a blog, it might be some other very popular Web site 

like Yahoo, which has very, very expensive advertising space as 

Internet ad activity goes. So we are trying to focus on the most obvious situation where money is being spent to influence someone’s 

election. 

Ms. WEINTRAUB. I think that is a really important distinction— 

I am sorry, Mr. Chairman, if I could jump in—that we are talking 

about, is potentially regulating money that pays for the ad that 

would appear on the blog. The fact that we have a regulation that 

might regulate the money that is paying for the ad on the blog does 

not mean that the blogger cannot then continue to blog, cannot 

then hold press conferences or exercise his or her rights of free 

speech in any other area. It actually goes more to the person who 

is buying the ad than to the blogger him or herself. 

The CHAIRMAN. It still goes to disclosure in a sense. Because I 

am not by any stretch of the imagination saying, to be frank with 

you, when these individuals go into the districts and do a press 

conference: ‘‘I am here to clean up the government, et cetera’’, you 

usually find out they have, tripped over themselves anyway somewhere along the line. Then you look at their web sites and the stuff 

they stand for and the out-of-towners in here. So a lot of it, frankly, 

is not effective politically in anybody’s district, either side of the 

aisle. 

But it goes to the question about the money. I am not suggesting 

you stop press conferences or free speech, but the reformers will 

say it still comes down to disclosure. Because if soft money is 

banned in the system, or trying to get soft money out of the system, the next thing you know somebody comes along and says, 

‘‘Hey, I will tell you what, you start this blog, but I am going to 

make sure that the money flows over towards that blog or wherever you go. In fact, why don’t you go on a couple of the online 

radio shows, and we will go ahead and advertise $100,000 worth 

there.’’ Now you start to say, is that some type of coordination? 

But that comes to the heart of my question: How do you determine that? And I would like to ask you, Chairman Toner, how do 

you determine that? How would the FEC say there was coordination and soft money afloat? Does it kick in because somebody files 

a complaint? Or do you have your staff surf web sites? I am just 

really curious to know how you determine that, if there has been 

a violation 

Mr. THOMAS. Well, Mr. Chairman, most of the activity we get involved with in terms of enforcing the law as it relates to Internet 

activity comes to us through complaints. There is a very vigorous 

community out there on both sides of the political spectrum, and 

they are always looking at Web sites, they are always scratching 

42 

behind it to try to find out if it looks like someone is actually subsidizing the Web site that is within, say, the control of a candidate 

or a party committee or something like that. So we have gotten 

several complaints along those lines. 

The coordination investigations are always difficult. It is very difficult to find someone who will ultimately admit that, yes, I had 

this conversation and, yes, within the technical confines of the 

Commission’s coordination regulations we crossed the line. But, for 

the most part, it comes to us through the complaint process. 

We don’t have a process—or we don’t have staff onboard who are 

surveying Web sites and looking for potential problems on our own 

initiative. We don’t do that right now. 

Mr. TONER. If I could, Mr. Chairman, I think this raises two 

points. 

First, there has been some discussion about that we are focusing 

on paid advertising, but we also have a proposal that would make 

clear that the press exemption extends to online politics; and also 

the chairman, I think, correctly noted that the individual volunteer 

exemption exists for people. 

But I think my point is that there would be no need for the agency to decide or for people on the outside to worry about whether 

the press exemption applies to the Internet if we didn’t exercise jurisdiction over the Internet in the first place. 

Similarly, there would be no need for individuals to have to determine whether or not they were in the individual volunteer exemption if there was no jurisdiction over the Internet in the first 

place. 

These are examples of the complexity of the law that arise if we 

exercise jurisdiction and regulate in any manner. If we don’t regulate in the first place, we don’t have to get into thorny issues of 

whether somebody is an individual volunteering for a campaign 

and protected. They would be protected like everybody else, because we would be saying, in very straightforward English, if that 

is ever possible in these regulation books, that we are not exercising jurisdiction in the first place; and, therefore, you don’t have 

to hire the lawyers—— 

The CHAIRMAN. That is the key, to regulate or not regulate. That 

is the question. And the court said you have to do something, so 

that is why this is a—— 

Mr. TONER. I should note that the Commission has sought en 

banc review by the full D.C. Circuit, and one of the challenges in 

that en banc review is whether or not the plaintiffs in the Shays 

case have legal standing. 

Now I don’t know how that is going to play out, but if it is found 

they do not have legal standing to bring suit in the first place, then 

there could be the possibility that the entire lower court ruling 

would be vacated, including the obligation on this Internet rulemaking. So it is hazardous to predict what might happen in the future, but I did want to note that there is ongoing litigation in that 

area. 

The CHAIRMAN. I would have normally moved on to the Ranking 

Member, and she is not here, so I will move on for 5 minutes and 

then the gentlelady from Michigan. 

The gentlelady from California. 

43 

Ms. LOFGREN. Thank you, Mr. Chairman. I am happy to be here 

this morning. 

As you know, I represent Silicon Valley in the Congress, so I am 

not the first person you would think of who would say let us regulate the Internet. In fact, I think it is a blessing that we have managed to keep the heavy hand of regulation off the Internet. I recall 

when I was sitting on the Judiciary Committee looking at the Digital Millennium Copyright Act that the first draft of that actually 

prohibited Web surfing, which I thought was interesting. So when 

the government moves in to regulate the Internet, we will almost 

always get it wrong, it seems to me. And I am inclined—obviously 

I want to listen to all the witnesses, but I am inclined to believe 

that we ought to just keep hands off. I mean, the whole point of 

Federal campaign finance regulation is because, you know, TV is 

so expensive. I mean, you need to have a level playing field. 

But the ability to enter the Internet, I mean, there is no barrier 

to entering the Internet. And so the rationale for regulation and 

control, that does burden free speech, and maybe for good reason 

when you are talking about buying million-dollar TV ad buys isn’t 

present in the Internet. It is a great leveler of people being able 

to communicate and have their opinions out there, and really it is 

what is interesting gets heard. It is a wonderful endeavor where 

the most interesting person, the most exciting blog actually floats 

to the top. 

So I am interested in—I don’t know whether you have had a 

chance to look at the bill that has been introduced by Senator Reid 

and Congressman Hensarling relative to this. Do you have a comment on whether that really accomplishes what I have just said I 

want to accomplish, Commissioner Weintraub, or any of you? 

Ms. WEINTRAUB. I think that it would. It certainly would lead to 

a hands off the Internet approach. I have seen those proposals in 

various iterations, sometimes freestanding and sometimes folded 

into larger packages. So obviously the Members will decide whether 

they want to have other things in addition to an Internet exemption. But my comments only extend to the Internet exemption 

itself. 

Mr. TONER. And if I could note, I think the Reid bill is excellent. 

It would solve the public communication part of the problem that 

was introduced by the Federal court decision here. There may also 

be—might make some sense to focus on whether a similar type of 

total exemption from the Internet from the definition of contribution or expenditure which would make ironclad that all activity on 

line is exempt from regulation, not just public communications, but 

in all forms, and regardless of whether coordinated or done independently. 

Mr. THOMAS. Congresswoman, I take a slightly different approach. While you are here, I will try to bend your ear. I think the 

problem that I have tried to articulate in my statement is that this 

blanket exemption for all Internet activity, it is in essence too 

broad because we are starting to see the use of paid Internet advertising increasing. In my opening remarks I referred to statistics 

from one of the on-line coalition representatives who testified at 

our hearings, and he pointed out that in 2004 he had identified 

more than $14 million worth of paid Internet advertising just in 

44 

2004 alone for campaign purposes. And it is like a lot of things, it 

is an opportunity; it starts out small, but it grows and grows and 

grows. We saw that with the soft money phenomenon. 

There are some other statistics. You are starting to see some 

large outlays by national party committees. One of the national 

party committees, it is in my statement, made payments of 

$260,000 for e-mail acquisition, payments of 200,000 and payments 

of 179,000 for e-mail services, and payments of 170,000, and 147, 

000 for Web advertising. So the numbers are starting to grow. And 

on a committee-by-committee basis, a campaign-race-by-campaignrace basis, you see the potential for someone who is otherwise prohibited from subsidizing that activity all of a sudden maybe being 

able to subsidize a significant amount in a particular candidate’s 

race. So that is what we are trying to focus on. 

As we have tried to point out, none of us has any interest in regulating what John Q. Citizen does on their home computer. We 

want people to be able to use the facilities at their workplace as 

long as it does not interfere with the normal amount of their work. 

They can work at the office at night on the office computer. We 

have regulations and ways of getting at really opening up the ability of individual of bloggers to undertake what they do, but we do 

think this broad exemption that is in the amendment that this 

committee adopted and that is in Senator Reid’s bill, at least I do, 

I think it is a little bit too broad. It can be better tailored. We are 

trying to do that through our regulations at the Commission. 

Ms. LOFGREN. If I may, Mr. Chairman, I know my time has expired, but I have a statement I would like to submit for the record, 

and I certainly will listen, but I am not persuaded that the Federal 

Government should regulate the Internet. I just am not. At the end 

of the day, there are many contentious issues before the committee, 

but it may be that we are going to agree on this one. And if we 

took the Reid-Hensarling bill and put it on the suspension calendar, we could probably get it done this afternoon, and that might 

be an approach we want to take. So I yield back. 

The CHAIRMAN. The additional materials are entered into the 

record. 

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The CHAIRMAN. Gentlelady from Michigan. 

Mrs. MILLER. Thank you, Mr. Chairman. I was a few minutes 

late as well. I do have an opening statement. Without your objection, I would like to offer it for the record also. 

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Mrs. MILLER. You know, first of all, I think we need to stop calling some of these different groups reformers. They are really not 

reformers, they are regulators, I believe. They just want to regulate, regulate, regulate. In fact, in another committee I sit on, I am 

the chairperson of the Regulatory Affairs Subcommittee on Government Reform, and we are spending a lot time looking at onerous 

governmental burdens through the regulatory process and what it 

is doing to industry, how uncompetitive it is making America in the 

global marketplace, and trying to dissect and eliminate some of 

these onerous government relations. What we are talking about 

here is not going to stifle competition, but has every opportunity 

to stifle free speech. 

As we are all marching down the information highway, and my 

staff sometimes refers to me as a technotwit, I try really hard to 

keep up to date. But if you were not really familiar with technology, some of this would just seem like gibberish, I think, to the 

average American who is trying to understand how what we are 

talking about actually is going to help them understand who is trying to influence their vote and influence the election process. And 

perhaps what you are dealing with as a result of the court action 

goes to why a lot of people raise consternation about activist courts 

legislating from the bench rather than the legislative body doing 

what they were elected to do. 

I agreed with your statements, Mr. Toner. I was not in Congress 

when BCRA passed, but it did seem to me, reviewing the law, that 

Congress did make a conscious decision to exempt the Internet 

from the McCain-Feingold Act, and that was the clear intent. I 

agree with your observation on that. And I notice that there was 

actually an article in The Hill last month where it was reported 

that Senator McCain had suggested that President Bush reappoint 

the Chairman to the FEC, and so I wonder why would he want to 

reappoint someone who was interested in internet regulation. Have 

you had an opportunity to talk to Senator McCain, and does he 

agree with your position on this subject, Mr. Thomas? 

Mr. THOMAS. I have not talked with Senator McCain except, I 

guess, twice in my life, and it has been years since that occurred. 

I assume that Senator McCain is reflecting what we are seeing in 

a comment that was just handed to me today from several of those 

groups who are basically taking the position that, I think, they 

don’t want to regulate the vast majority of what we are seeing on 

the Internet. I think they, as I suggested this morning, are thinking we do need to preserve the core provisions of the statute that 

would prevent someone from just paying for a candidate’s Internet 

services, and that would at least get at this phenomenon we are 

starting to see of paid advertising. That is real money that someone can pay to support a particular candidate’s race, and so where 

you have got that clear pattern of money actually being expended, 

maybe the base contribution limits and prohibitions limits should 

apply to someone who is paying for advertising on the Internet. 

But I think that is probably the position that Senator McCain 

would take, along with the groups that have filed that recent comment. 

55 

Mrs. MILLER. Well, like all types of regulatory things, particularly when it comes to campaign finance, there is never any really 

black and white. I think there is a lot of gray in this rainbow. 

I was trying to make some notes when you were speaking about 

80,000 new blogs—was it a day—are coming, on-line? I can’t even 

imagine that you have any estimate of what your budget and your 

staffing level requirements would be if you actually had to start to 

regulate some of these kind of things. And, of course, we have very 

strict regulations under the Campaign Finance Act about corporate 

involvement, et cetera. Some of these blogs, I understand, actually 

incorporate to protect exposure. How would you be able to regulate 

that to be certain that these bloggers are not already negatively 

impacting the laws on the books? 

Mr. TONER. Congresswoman, as you know, I don’t think we 

should go there across the board. That would be the solution, because otherwise we might have to hire some additional staff to 

keep up with this. But 80,000 new blogs are created every day in 

cyberspace. Billions of links exist on the World Wide Web; millions 

of Websites, millions of e-mail sent out ever day. For me, that is 

what makes it fundamentally different than other types of communications. 

I think the Chairman is correct in noting in the past cycle spending that is related to the Internet, there is no question that political committees and others are focusing on that. They are developing e-mails, Websites, the ability to do links, candidate often set 

up their own blogs, a wide variety of Internet activities. But where 

is the potential for any of that to dominate this medium? Where 

is the potential for anyone, no matter how much money they might 

want to devote, to be able to crowd anyone else out in this medium? That is different from television or radio or other types of 

communications where you really can buy a lot of points and prevent other people from getting on the air. And so if the Internet 

is different from that, there is no danger of that, given it is doubling every 51⁄2 years. Where is the basis for regulation where the 

touchstone of any permissible campaign finance regulation is corruption or the appearance of corruption? How can that happen in 

this kind of environment? 

Mrs. MILLER. I know my time is up. One more question. Just to 

follow up on that, because it is so true. I had been a secretary of 

state before I did this job and did campaign finance in my State 

of Michigan, and obviously I was always looking at Buckley and 

what it meant. And the impetus of Buckley was to negate the impact of big money on the influence of the electoral process. I am 

just wondering, could anybody give me an example right now 

where you would see a specific example of something that is happening on the Internet with paid political advertisements that you 

feel is corrupting the process? 

Mr. THOMAS. Well, we get that question fairly frequently, show 

me some evidence of corruption. 

Mrs. MILLER. Show me the money. 

Mr. THOMAS. Exactly. It is always—I am not going to go there. 

I am not going to assert any particular thing I have seen is corruption. What I would say, and this goes back to the type of example 

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56 

tion whereby you can spend as much as $50,000 to get on that very 

popular Website. I suppose there is even more expensive advertising on bigger Websites that a lot of Americans go to like Yahoo 

or something like that, Google, if that is your opening Website on 

your computer. So if someone wants to pay for advertising to support a candidate on a site like that that is very popular and would 

be seen by a lot of folks, it can start costing a lot of money. 

So that is really the focus I am trying to bring to you. There are 

some situations where I guess this advertising is starting to get a 

little bit more expensive. We did get folks at the hearing telling us 

for the most part most Internet advertising space is very inexpensive. And so most of it probably—if someone is running a site that 

for some reason provides paid advertising, and they are an individual, if it supports a particular candidate and basically someone 

is subsidizing that, that person has a contribution limit as an individual of up to $2,100 per election, so a little $50 ad on someone’s 

Web site is not going to be a problem. But I grant you there are 

situations where you can start to affect more and more folks because there is probably more and more opportunity for paid Internet advertising. As the vice-chairman pointed out, lots more 

Websites are popping up. 

So it does have the potential, even if we focus on this advertising 

aspect, to be fairly broadly—broad in impact. I think that Commissioner Weintraub’s idea of maybe trying to allow some flexibility 

for bloggers to incorporate without triggering the standard corporate prohibition rules, I think we can try to find a way to work 

there. That would be very helpful. 

Ms. WEINTRAUB. Congresswoman, if I might, you had mentioned 

how many staff we would need to try and deal with this issue. 

About half the people in the room right now are staff of the agency 

who are here trying to read the tea leaves on what kind of regulation they might be writing or maybe not. 

Mrs. MILLER. So this is a full employment bill for them, right? 

Ms. WEINTRAUB. We have plenty of work to do, Congresswoman, 

and I would like to differ with something the Chairman said earlier. I think that you can see the outlines of the regulatory approach that we are contemplating now. Again, I didn’t come here 

to lobby one way or the other, but if you are going to pass a law 

and obviate this rulemaking, on behalf of the staff that would still 

have to put in a lot of hours to work out the fine points, I would 

appreciate it if you would do that sooner rather than later, not 

after we write the regulation, but before we put that work in, because believe me, we can find other jobs for them to do. Thank you. 

The CHAIRMAN. I have just one more question. If you want to ask 

another question before we go to panel two, whatever either Member would like to do. Let me ask you just a quick answer for this: 

How effective do you think the Internet actually is in its believability when it comes to bloggers and political activity? The internet might not be particularly credible because you can put anything you want on there. Something becomes very salacious, and 

then the other supporters come out and attack another candidate 

in the case or beat each other with baseball bats, and the rest is 

history. 

57 

In a way, the internet is not as effective a tool as the good oldfashioned way of people talking to each other in communities and 

neighborhoods on where they stand on the candidate. I also think 

there are times where the internet tries to get something going politically on groups, or advocacy groups, or candidates, and hope to 

get it into the mainstream media, where it would—I can’t believe 

I am saying this—have some validity in the mainstream media. 

But it would have more validity if it is printed in a major newspaper, radio or TV rather than if you read it on the blog, because 

anybody can sit there and get mad and blog back. 

Having said that, how effective are the blogs politically? If people 

are advertising and spending all this money, should you really regulate it? It is out there, it is free speech, but not really an effective 

political tool as much as going door to door and things like that? 

Any comments in that direction? This is probably outside the box, 

what I am asking. 

Ms. WEINTRAUB. Well, Mr. Chairman, I think that the second 

panel would probably have a lot to say on that subject. 

The CHAIRMAN. I am not saying they are not effective, but if you 

are looking for the political activity in the blog, and it is going 

around BCRA and soft money, maybe it is not in the sense—maybe 

the advertisement angle is too much to look at to regulate. That 

is what I was trying to get at. 

Ms. WEINTRAUB. I think that the information that is out there 

on the Internet is about as reliable as what you get walking around 

in your neighborhood and talking to your neighbors. Some of your 

neighbors are more reliable than others; some are biased, and others are not. You can make that assessment. I think what a lot of 

people find to be one of the great virtue of the Internet, if somebody says something not reliable, inevitably there is somebody else 

who is going to be banging away at their keyboard a minute later 

pointing out the fallacies. 

The CHAIRMAN. So you think they are politically effective, the 

bloggers? 

Ms. WEINTRAUB. I think the last election showed an awful lot of 

effective political activity took place. 

The CHAIRMAN. So why don’t you want to regulate them? 

Ms. WEINTRAUB. It is not a question of whether I want to regulate it or not. 

The CHAIRMAN. If you say they are politically effective, and it is 

an arm of politics, and there is money over there. 

Ms. WEINTRAUB. We will regulate it. We are under a court order 

to regulate it. 

The CHAIRMAN. I am not trying to ask a trick question. If they 

are politically effective entities, and soft money is going to them so 

the reformers would say, ‘‘Yes, it is effective’’, or ‘‘We write them 

off, they are really not effective’’, people are still talking to each 

other in neighborhoods, so why should we regulate them at all? I 

have supported along the lines of not regulating, but I am just saying this argument becomes so confusing, and they either are politically effective and are utilizing soft money to bypass the system, 

or they aren’t, and if they were, how would you even regulate 

them? 

58 

Mr. THOMAS. I would note, Mr. Chairman, you are about to hear 

from a gentleman, Mr. Mike Krempasky, who runs RedState.org. 

If you don’t think that is an effective Website, you are not really 

sort of following the political process. It is a very effective political 

Website, and I would note from the outset he spoke with advisors, 

and they basically decided they were going to set themselves up as 

a political committee, operating as a political committee. 

There is a broad array of Websites, and some are obviously more 

effective than others. I think the committee would be very well 

served to do some really good research to see if you can get some 

sense as to which of these Websites were utilized effectively during 

the campaign and how, get some flavor for whether this phenomenon of Internet advertising really is something where it was 

effective in a particular race. You have got a lot of colleagues, and 

maybe you could inquire from your colleagues, ‘‘Tell me about your 

race; can you remember any advertising that was on Internet 

Websites that people seemed to have picked up on and followed 

and that may have gotten tons of chatter?’’ I think that is a very 

valuable part of this committee’s function. 

The CHAIRMAN. I am not saying by any stretch of the imagination that they are not effective. I just threw that out there, not 

being facetious, but throwing it out there. Some people say, well, 

you dismiss it, but you might want to have some regulation because they are effective, and soft money is going there. And I am 

saying it is a very confusing issue, but it still comes down to free 

speech and the internet, which is a unique, different creature than 

a newspaper or a radio or a television. Even here in the House we 

have looked at the transmission of an e-mail, as long as it is not 

for political purposes, as a different thing that we look at to regulate versus if the Member puts out the newsletter. So the Internet 

is a different, type of creature. 

Mr. TONER. If I could, Mr. Chairman. I think a strong argument 

could be made that Web blogs and the Internet in general is selfregulating. If there are over 14 million blogs in this country, the 

raw number of them prevents any one of them, no matter how 

widely read, to dominate discourse. And also, Internet communications often require proactive steps by the viewer to go get that information, unlike television or radio, which can be very passive. 

The raw breadth of the Internet, the accessibility of it, I think an 

argument can be made, really prevents the ability for anyone to 

have a corrupting influence no matter how much money they may 

be spending on it. 

The CHAIRMAN. Do either of the Members have additional questions? 

Thank you for enlightening us today and confusing us today, but 

actually being here to have a good discussion on the issue. I want 

to thank all three of the Commissioners. 

The CHAIRMAN. We will now move on to the second panel. After 

the hearing I am sure the second panel will blog us to death to 

show how prominent and powerful they actually are. Our second 

panel, we are fortunate to have with us today two operators of two 

very popular political web logs or blogs. These witnesses will explain to the committee their perspective on Internet regulation, 

which will shed light on how the blogs operate. 

59 

First we have Michael Krempasky, who runs a conservative blog, 

RedState.org. Then we will hear from Duncan Black, who runs the 

liberal blog Eschaton. We look forward to their remarks. 

We also, I would note, invited Eli Parser of moveon.org. and 

Marcos Zuniga of dailykos.com. They weren’t able to come due to 

some scheduling conflicts. 

We are glad to have both of you here to hear your point of view, 

and we will begin again, I think, with Mr. Black. Thank you. 

STATEMENTS OF DUNCAN BLACK, FOUNDER, ESCHATON 

WEBSITE; AND MICHAEL KREMPASKY, DIRECTOR, 

REDSTATE.ORG, FALLS CHURCH, VIRGINIA 

STATEMENT OF DUNCAN BLACK 

Mr. BLACK. Chairman Ney, members of the committee, thanks 

very much, and thanks for the introduction. I will stick roughly to 

my prepared remarks, although I will deviate somewhat in response to some of the comments of the previous panel. 

I just stated my name is Duncan Black. I write for the Website 

Eschaton, a blog. Everything on the Internet these days tends to 

be called ‘‘a blog,’’ but whether or not that is valid or not I don’t 

know, but I do actually have a blog, and I started it in April of 

2002. On the Website, I cover politics, current events, economics, 

and cultural issues. 

During the 2004 campaign the site averaged between 1- to 3 million viewings per month, and in addition to writing about politics, 

I also engage in fundraising drives for a number of Federal candidates and the DNC and other organizations, candidates including 

Joe Hoeffel, John Kerry, Ginny Schrader, and Richard Morrison 

and others. I run advertising and accepted paid advertising on behalf of Federal campaigns. 

My goal is really here more to provide helpful information as I 

can regarding the narrow question of whether greater scrutiny and 

regulation of Internet political speech is really necessary in order 

to meet the intent or spirit, what I consider to be the intent and 

spirit, of campaign finance law. I am no expert in this area, but 

my understanding of the basic motivation and statutory language 

of the legislation and the general purpose behind all such campaign 

finance language and laws is to reduce the impact of concentrations 

of financial power on Federal elections. 

It is my opinion, either through the regulatory process of the 

FEC, if possible, given the current court decision, or through slight 

modification of actual legislation, the government should take steps 

to not implement and force regulations which impact the ability of 

small actors to engage in political speech on the Internet, an activity which neither requires nor necessarily benefits from being 

backed by significant financial resources. 

The Internet generally and blog specifically is a medium which 

allows anyone the full powers of the press and to potentially command a large audience at a minimum cost. Unlike broadcast, cable 

or newspaper distribution where there are significant barriers to 

entry, both financial and otherwise, there are almost no barriers to 

entry on the Internet. Anyone can reach a large audience for a 

minimal cost. I find it hard to believe that the intent behind camVerDate Aug 31 2005 09:09 Oct 28, 2005 Jkt 024061 PO 00000 Frm 00061 Fmt 6633 Sfmt 6602 E:\HR\OC\A061.XXX A061
60 

paign finance legislation was to sort of leave large media corporations essentially untouched through the media exemption by campaign finance law while failing to grant similar latitude or exemption to small Web-based publishers. 

If the current statutory language doesn’t make it clear, and the 

court decree requires Internet communications be regulated by legislation which I believe is poorly suited for doing so on the Internet, which is inconsistent with the broader intent of campaign finance legislation, then the legislation should really be changed. 

Whether by clearly extending the current media exemption or 

through other means, those who use the Internet for the purpose 

of disseminating news, commentary and editorial should be as free 

to do so as are Clear Channel, Disney, News Corp., Time Warner 

and others. 

So I began my site, as I said, in the spring of 2002. Both then 

and now I use almost entirely free web services. My direct operating costs of my website, really being generous here, are about 

$150 a month, if that, and that includes paying for a standard 

Internet connection and maintaining a working computer. I have 

never spent any money to advertise my sites or on any other sort 

of public relations activity or any promotion of my site whatsoever. 

While the meaning of Internet statistics is always somewhat unclear, I get about 125,000 visits per day on an average day, and 

that probably means I reach maybe 40,000 unique sets of eyeballs 

for a day. 

I began my site simply as a hobby. I had no intention of making 

money, but eventually, through large enough traffic, I could make 

money through advertising. I haven’t yet incorporated, but other 

bloggers have done so primarily for the purpose of limiting liability. 

As with many other blogs, my site provides links and excerpts of 

current news article, commentary and other events and other editorial comments. I have endorsed candidates for Federal elections, 

as most newspapers do. I encourage readers to donate money to 

candidates I recommend, something which you see all throughout 

the media. Just the other day Sean Hannity was telling all of his 

listeners to donate to a candidate for Federal election and pointing 

to them on his website. No different than what I have done. The 

primary differences between me and Sean Hannity or major newspapers, or partisan magazines, talk radio, cable new networks, 

broadcast news, et cetera, is what I do doesn’t require any money. 

That is the real thing. 

The actual financial expenditures I have to make, as I said, $150 

a month, a generous estimate. Now, it is true you can spend money 

on a site, and other bloggers do. You can add some bells and whistles and retain more control over some aspects of your site by 

spending money, but it really isn’t necessary to spend money to 

have successful and influential sites. It is unclear what the advantage often is of spending money. 

So I think those who want more Internet speech to sort of fall 

under the regulatory framework believe that, at some point, large 

sums of money spent on the Internet could have a corrupting process. Now, I share the concerns about the future possibility. I certainly wouldn’t say that this is not a concern at all, but I don’t see 

that such abuses have yet to take place. I don’t yet see a mechaVerDate Aug 31 2005 09:09 Oct 28, 2005 Jkt 024061 PO 00000 Frm 00062 Fmt 6633 Sfmt 6602 E:\HR\OC\A061.XXX A061
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nism by which money, just simply throwing vast sums of money at 

the Internet, is really going to have sort of a disproportionate effect 

on the electoral process. 

You were talking about the effectiveness of Internet sites and 

whether they are effective. I think the real key here is there isn’t 

a very strong connection now between the effectiveness of a site 

and how much money is spent on it. On site, you can spend a lot 

money on the site and not be effective at all; you can spend very 

little money as I do, and I am occasionally effective. Hopefully I 

am. But the point is there is a disconnect between the effectiveness 

and money. 

I would also submit that to the extent that we are concerned that 

as technology evolves and individuals or groups, organizations, 

spend large amounts of money on, say, Internet video advertising 

and these kinds of things, I think the real power of those ads won’t 

be when they are on the Internet; it is when cable news, or the 

nightly news decides they are interesting ads and rebroadcasts the 

ads for free over free media to the world as just part of their political conversation. It is sort of the amplification effect of other 

media that is going to make the difference, not so much the money 

spent on the Internet itself. How you deal with that, I don’t really 

know. 

I do share the expressed concerns by Senator Feingold and the 

Chairman of the Commission that the overly broad language in the 

Reid bill potentially opens up loopholes on coordinated activity. I 

think the example of being concerned that if you essentially allow 

somebody not linked to the campaign to essentially pay for the entire Internet operations of a political campaign, that that is something to be perhaps concerned about. 

Whether money spent on the Internet is something we are concerned about is corrupting the process, certainly any campaign now 

has to spend nontrivial amounts of money to have an Internet operation. That is just part of having a modern campaign. If you let 

somebody just pay a million dollars to cover those expenses, we 

could potentially have either corruption or the appearance of corruption. 

So I understand those kinds of concerns, and I certainly think 

those concerns can be addressed largely if a broad media exemption 

is passed by the FEC. I think what is critical, both for the poor 

staffers for the FEC as well as the rest of us, is that we get some 

clarity on these issues sooner rather than later, because we are 

heading into the 2006 election season just about now, and it is sort 

of vital people like me or any ordinary citizens participating in political discourse on the Internet don’t suddenly find themselves experiencing investigations as a result of complaints filed through the 

FEC or some other mechanism. 

I thank you for your time, and I look forward to answering your 

questions. 

[The statement of Mr. Black follows:] 

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The CHAIRMAN. Mr. Krempasky. 

STATEMENT OF MICHAEL KREMPASKY 

Mr. KREMPASKY. Mr. Chairman, members of the committee, I 

want to thank you for your invitation to be here this morning. Not 

long ago if someone would have asked me to come to Congress, I 

would have expected it would be to apologize for some intemperate 

remark I wrote on a Website. Now that Commissioner Weintraub 

informs me that there is a roomful of FEC lawyers behind me, I 

am just hoping to get out alive at this point. 

I want to talk to you as someone who is quite potentially looking 

at the business end of the regulations that you are considering, the 

regulations that the Commission is formulating, and I want to 

start with a statement that I hope that we can agree on, regardless 

of our opinions or views on campaign finance generally, and that 

is that technology, the Internet, the ability to communicate across 

the Internet has done more to democratize our politics than any 

law could hope to do. It has put more opportunity in the hands of 

more individuals than we have seen any contribution limits or bans 

on communication. It has given anybody around the country, the 

law professor in Tennessee, the homemaker in Ohio, the college 

student in Arizona, the ability to participate at an influential level 

in our politics whether they are local campaigns or national campaigns. 

One thing that is crucially important to remember about this medium is that despite what figures you are going to hear about how 

much money is spent on line or how many people participate on 

line, it is a medium in which passion and creativity really do trump 

brute force and muscle and funding. And to your question, Mr. 

Chairman, earlier about whether or not they are effective, I think 

they are, but that doesn’t mean they ought to be a target of regulation. Effective free speech is no more dangerous to our politics than 

ineffective free speech. 

Now, in our rush to close loopholes, or perceived loopholes, I 

think it is important to remember that we are talking about fixing 

something that hasn’t really been demonstrated to be broken yet. 

We did not see massive amounts of soft money circumventing the 

system in 2004; we didn’t see rampant spending across the Internet 

distorting or corrupting our politics. We are really talking about 

fixing a problem that is either not there or certainly that we don’t 

understand yet. And unlike parties and candidates and campaigns, 

whether at the national or local level, bloggers are not sophisticated legal actors. They do not have general counsel, don’t have 

budgets to pay to deal with audits and reporting. They really are 

the small speakers that we ought to protect at almost all cost. 

I want to make sure that we understand that when we hear 

about potential loopholes or we hear the specter of these things, 

that in the rush to close them, it is the small speaker that is going 

to be trampled. They are not going to navigate Federal election 

law, they are not going to read FEC advisory opinions, they are 

just going to be quiet. If that is the end result of either a piece of 

legislation that is passed or not passed, or a rule from the FEC 

that is either passed or not passed, that would be a real terrible 

thing to happen. 

66 

Chairman Thomas, in fact, urged you to wait and let the FEC 

sort through these issues. I think in his written testimony he refers 

to sort of bringing their expertise to bear on this question. And 

there is no doubt that the Federal Election Commission has experts 

in law and politics and regulations. But I think that when it comes 

to the issue of expertise and technology, I think that may be overstating it a bit. I have brought up several times that one of the 

Commissioners opened the first hearing on this issue by telling the 

entire room present that no one in the room knew less about the 

Internet than he did. To his credit, he has tried to learn a little 

bit since then, but I still think that the issues of speech and freedom that we are talking about are really important, and we have 

to understand that it is not just about a blog or about an e-mail 

list or something that we are talking about today, it is what is the 

next form of communication, what is the next opportunity the people have to participate, and how can we make sure that we don’t 

just chill speech, but that we don’t actually inhibit the development 

of new technology. 

Now, as Duncan mentioned, I think that one of the easiest ways 

to solve this question is to simply acknowledge in law what we already know, and that is that new and alternative media, the most 

commonly talked about one now of which is bloggers, are, in fact, 

media. Rush Limbaugh wakes up every day trying to change the 

country, influence elections, and the law grants him an exemption 

for everything he does through his outlet. So what possible good is 

it to protect Rush Limbaugh and Paul Begala on CNN while they 

are spending corporate money to affect our politics while potentially regulating people like Duncan and I? That to me doesn’t 

seem to make any sense at all. 

Finally, I think I would just like to point out that the legislation 

before this committee which mirrors the Reid and Hensarling bills 

doesn’t solve all the problems. It does leave gaps in the campaign 

laws before BCRA that still have to deal with bloggers and people 

that communicate on the Internet, but what it would do is put Congress on the record saying that this ought not to be regulated, and 

we are going to figure out how to make sure that is the case, that 

there still remains some place, some opportunity for people to participate as freely as they want, and that we are going to support 

and protect that. 

So I thank the committee for its time, and I look forward to answering any questions you might have. 

[The statement of Mr. Krempasky follows:] 

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The CHAIRMAN. I think the point you both made was the point 

I was making at the end: Blogs are effective. Some people say they 

aren’t, but they are effective. Of course, the blog is only as effective 

as its credibility, how it conducts itself, how it outreaches; but I 

think you both make a good point that effectiveness does not necessarily equate to money. You can spend a million bucks a year on 

the best bells and whistles on a blog, or spend 150 bucks a month, 

and it can be just as effective. So that is kind of a leveling of the 

issue, and should be able to support candidates and raise money 

and all that. 

Well, we will have some reformers today, but I assume if candidates are directly involved and out there soliciting soft money out 

of companies and unions and trying to get that in the system, that 

might be a whole different world. But the bloggers on their own are 

just generally independent and will have candidates, like the two 

of you, that you will support. That is the point I was trying to 

make. I am not sure just because the blog is successful, which they 

are, a lot of them, equates that you have to take it and regulate 

it. 

I just have one question to both of you. Do you think the blogging 

community—not both of you, but just the blogging community in 

general in the United States are worried that if regulation comes 

out that they could run afoul? Would they go towards hiring the 

lawyers they need, or would it stifle communication? Are bloggers 

around the United States concerned about regulation, or do they 

know it is going on? 

Mr. KREMPASKY. The fact that Duncan and I have been working 

together on this issue sort of speaks to sort of dogs and cats living 

together. I know that when the first—when this first hit the news 

back in March, a group of us, conservatives, liberals, libertarians, 

put together an on-line coalition of people that didn’t agree on anything except this. We presented an open letter to the Chairman of 

the Commission, and within about 36 hours we had about 38,000 

bloggers sign on to the principles of that letter, asking for more 

protection as media, opposing more intrusive regulations, and 

warning about really two things; one, that they would chill speech, 

because bloggers don’t have access to counsel, they don’t have folks 

like the talented people here that come and testify on behalf of either groups or candidates. But just as dangerous for those that 

support campaign finance reform or regulation, with the 17 or 14 

million blogs that Commissioner Toner pointed out, that is a lot of 

potential complaints that can be flung at each other. If you like the 

idea of getting big money out of politics, the last thing you want 

to do is have the people behind me spend all their time with the 

3,000 complaints they could get in a morning about this blogger or 

that blogger filed by other bloggers. So absolutely they are concerned. 

Mr. BLACK. They are definitely concerned. I agree with just about 

everything he said. 

I just want to add to stress while I imagine certain bloggers 

might hire counsel and have access to lawyers, and the community 

would probably get to work lobbying Congress to the extent they 

could, and we would see how effective we are, but it certainly 

would have an incredibly chilling effect and in part because of what 

74 

Michael said, in part because it is a very partisan atmosphere, and 

one way to attack would be to attack your opponents through the 

FEC through the complaint process. The instant any of us, or most 

of us, who—for most people it is just a hobby, just something to do 

on the side. They get that registered letter or however the complaint arrives, that would have a serious chilling effect, and a lot 

of people who were participating the process would decide it was 

no longer worthwhile to do so. 

The CHAIRMAN. Why don’t we move on to the other Members. 

I think blogs are effective. I think the greatest thing about the 

blogs, you do not have to have a lot of resources behind yourself 

to start it. I think that gives the average citizen from any walk of 

life the ability to get into the political process. 

The gentlelady from California. 

Ms. LOFGREN. Just a couple of questions. I think I have already 

made my inclinations known to the prior panel. I never am very 

interested in regulating the Internet because of where I am from, 

I guess, but I do want you to comment on the suggestion made by 

the Chairman of the committee. I am summarizing, but my sense 

is that he was thinking that a distinction could be made between 

what you do and say, for example, Yahoo. I mean, Yahoo is publicly 

traded. Their CEO came from Walt Disney Corporation, they are 

different than you guys, and that that somehow should be a subject 

of regulation. I am not sure how you make the distinction, but I 

am wondering if you have thoughts on that proposition. 

Mr. BLACK. First of all, it is not clear—I mean, Yahoo is a publicly traded company, but it is also a media company. It runs newspaper articles from newspapers all over the world, including editorials from all over the world, people operating other media; publishes columns by opinionated people who are trying to affect elections in this country in one way or another. So Yahoo is a media 

company, and they are free to do all this without having any regulatory oversight by the FEC. There are restrictions on other types 

of corporate activity that they engage in outside the context of their 

media operation, but nonetheless the basic activity of running news 

and commentary on their portal site, they are perfectly free to do 

that. In that sense I am not sure what the important distinction 

would be between what I do either as an unincorporated blogger, 

which I am, or if I were to incorporate as a media company, and 

Yahoo the media company. 

Mr. KREMPASKY. I think Duncan’s point about Yahoo is a good 

one. I think what we are really talking about is the specter that 

was raised at the hearings this summer about what if Halliburton 

had a blog; wouldn’t that be awful? Professionally I work with a 

lot of corporations to try to teach them how to communicate either 

through or with blogs, and I can tell you that all of the things that 

make blogs successful, speed, responsiveness, personality, tone, 

credibility, even a bit of irreverence, none of those exist very well 

in a corporate environment. 

So the prospects of a successfully funded blog in the presence of 

things like general counsel—and I have to say that I can tell you 

that I had a conversation with a corporate legal counsel this week 

that had not only convinced his client but the rest of the company 

that if they were to run a blog, they would not be allowed to link 

75 

to a news article without violating some copyright laws. And so the 

risk of the corporate environment when it comes to succeeding in 

this medium, they are really not as compatible as people think they 

are. 

Ms. LOFGREN. Let me ask another question, because I really 

think opening the door to regulating the Internet is a mistake; 

however, there are regulations that are going to apply whether or 

not you are on the Internet. I am wondering, I don’t know whether 

either one of you has filed as a 527. Have you? The 527 regulation 

in terms of tax-exempt status is going to continue to rule your activities, whether it is on the Internet or off the Internet, in terms 

of just whether you are eligible for the exemption. You wouldn’t 

suggest that the IRS rules be changed in any way, would you? 

Mr. KREMPASKY. Let me say that RedState filed all of these legal 

forms and with all these specific agencies because we expected this 

issue to come up this year. And we saw everything that was going 

on in the campaign last year and had to go out to raise the money 

to pay a lawyer to file the paperwork and file reports every quarter 

disclosing every penny that comes in and goes out. And we did that 

hopefully so others would not have to go through that burden. 

I don’t have any comment specifically on the IRS or the rules 

that govern political committees except to point out it is not an 

easy thing for small speakers, individuals, or even small groups to 

navigate that process at all. 

Ms. LOFGREN. I know my time is almost up, but it seems to me 

that while we don’t want to regulate speech, people who are getting 

a tax exemption are going to have to still follow the tax exemption 

rules of the IRS, and that we should make that clear. 

I thank the Chairman and yield back. 

The CHAIRMAN. Mr. Ehlers. 

Mr. EHLERS. Thank you, Mr. Chairman. Thank you for having 

this hearing. I think it is a very important topic. I have read a few 

blogs here and there, but I wish I had more time to read them. 

They are very interesting, very entertaining, and it is a pleasure 

to have you here to present your point of view. You look remarkably normal for bloggers. 

Mr. KREMPASKY. Sir, you look remarkably normal for a Congressman. 

Mr. EHLERS. I am a fellow nerd, and I managed to cover it pretty 

well, but my plastic pocket protector always gives me away. 

As you know, most of the laws we write are designed to regulate 

the bad guys, not the good guys, and from all appearances you 

folks are good guys, and I applaud what you are doing. I think it 

is very good. 

The concern that I think the FEC and that some Congressmen 

have is what about the bad guys who will misuse the Internet, misuse blogging, and in ways that certainly at least violate the spirit 

of the campaign finance reform law. Can you imagine ways in 

which some of your less ethical colleagues could basically subvert 

the law or violate the intent of the law by misusing their freedom 

on the Internet? I would just be interested in any responses you 

might have to that. 

76 

Mr. KREMPASKY. I think regardless of how they might do that, 

the unfortunate companion to that is that it is absolutely unenforceable. If they chose—— 

Mr. EHLERS. We will get to that later. I want you to think creatively about—— 

Mr. KREMPASKY. Certainly people could use servers and Websites 

in other countries. Chairman Thomas mentioned foreign nationals 

and governments spending money. I am not sure how you get at 

that, if it is actually a Canadian or English company and Websites 

pouring content into America that Americans are reading, whether 

or not that violates the law or not. It certainly doesn’t seem to be 

a question we can start to answer. I suppose there are ways that 

people can spend a lot of money on the Internet that maybe they 

would not otherwise be able to spend if it were in television or 

radio or things like that. 

But I think one thing that Duncan made pretty clear is that 

there is really not a corollary between spending and effectiveness. 

Commissioner Toner pointed out earlier that you cannot really 

crowd anybody else out. So even though you might be able to spend 

amounts of money, it is not like you can have the same impact in 

this medium, which I think is a completely different animal. 

Mr. BLACK. I think people can behave unethically on the Internet 

as they can in all walks of life, and a lot of what we think of as 

ethical issues, such as not disclosing conflicts of interest, not disclosing financial connections to individuals or groups, or anything 

else that you may be endorsing or supporting one way or the other, 

all those are potential unethical behavior that can be engaged in 

on the Internet and are engaged in every single day throughout the 

rest of our media where people are going on TV and certainly not 

always disclosing what groups they work for or what groups they 

represent. Maybe they are not even being unethical, it is just in the 

interest of time, they are not going to post their CV on the television screen every time they have something to say. 

I think those issues of ethics exist throughout the media and potentially would be no different in Internet activity. I am not sure 

that means, therefore, we have to regulate Internet activity exactly. 

Mr. EHLERS. Let me give an example that just occurs to me. In 

the last election we saw some individuals who spent millions and 

millions of dollars of their personal money on the campaign, all of 

which was duly reported some ways through the IRS, which is not 

as effective as FEC or as timely, but nevertheless they did that, 

and it was reported, and everyone knew what they spent and that 

they were trying to influence it. 

I suppose someone with huge amounts of money would hire 1,000 

bloggers and say, okay, you go to it. I want you to talk about this, 

and I want you to have this political point of view, and in order 

to boost your readership, I want you to offer prizes to your readers 

if they read your message all the way through and spot certain key 

points, can answer a question at the end; they send it in, and if 

they are right, they get $200 or whatever. This would be a very effective way of spreading false information and clearly violating the 

intent of the campaign laws, because someone would be spending 

a lot of money to spread a message in a very effective way. Would 

77 

you regard that as inappropriate? Clearly they are not in your category where you are trying to scrape along and write entertaining, 

interesting, concise letters, but basically being bribed to read propaganda. 

Mr. BLACK. I think to some extent you described an extension of 

the modern public relations industry. Yes, you can find ways. 

Mr. EHLERS. But they have to report. 

Mr. BLACK. Certainly, but as long as this stops short of endorsing 

Federal candidates, then they are probably not going to run afoul 

of campaign finance laws. The public relations industry is very 

good at influencing public opinion on a variety of issues up to and 

including essentially writing op-eds and signing other people’s 

name to them with their permission, for payment. These kinds of 

things go on all the time. It is only once you get to influencing Federal elections directly that you run into issues with the campaign 

finance laws. 

Mr. EHLERS. I will yield back in a minute, Mr. Chairman. I just 

want to apologize for being late; I had a couple of other meetings 

and shortly have to go to the floor to speak on a bill that is up. 

This is a topic I am very interested in, and thank you very much 

for being here. The short time I have been here, I have learned a 

great deal. Thank you. 

The CHAIRMAN. Thank you. 

Gentlelady from Michigan. 

Mrs. MILLER. Thank you, Mr. Chairman. 

I think it has been interesting listening to you both using similar 

examples about how, as we sort of move towards the possibility of 

regulating the Internet, which I think is regulating free speech, 

and thus very dangerous, yet the media has a complete and free 

blanket of protection under free speech. The media is protected, 

and yet oftentimes—I think you, Mr. Black, used an example of the 

media using as part of their newscast, something they saw on a 

blog or on the Internet. So the very impetus of that particular 

newscast, which is freedom of the media, yet we are moving to actually regulate that part of it. 

And it is a very common element in campaigns. You showcase an 

advertisement that you are about to play, and you have a press 

conference, you have all the media come in, you show them the ad, 

and you are hopeful the media will then broadcast your ad for free. 

Probably the best example of that in the last Presidential was the 

swift boats, which was a very small buy and ended up with everybody just broadcasting and talking forever about this particular ad, 

yet they didn’t have to really disclose how much was spent all over 

the media on that. 

I think most people would agree that many media outlets do 

have a bias toward an ideology, whether that is conservative or liberal or what have you. So I just make that observation as we are 

looking at this question, because it is almost counterintuitive, in 

my mind, to be thinking about regulating the internet—perhaps because it is unconstitutional in my mind as well. There certainly is 

a very slippery slope about regulating the internet and free speech. 

I would just ask for your observation. I am not sure if either of 

you have any thoughts on this. Why is the thinking that you have 

to regulate it because of dollars spent? You were commenting about 

78 

how inexpensive it is to create these blogs. How could you even 

place a value on an endorsement that is on a blog or a candidate’s 

picture that is on a blog or those kinds of things, an endorsement, 

et cetera? Could you comment on that? How could the FEC even 

determine a dollar value and decide whether or not they were 

going to regulate it? 

Mr. KREMPASKY. I think I would almost leave it to someone associated with the FEC to talk about how they come to conclusions 

and have formulas and such. I think, though, it does raise really 

one interesting question, and that is if the Federal Election Commission were to come up with a threshold or some line over which 

if you spent above that, you are now considered an active participant in the target of resolution. On the Internet there is a dynamic 

that does not exist off line, and that is you can actually create content at home as a volunteer that you find interesting. Maybe you 

edit some videos yourself and set them to music or do something 

interesting or funny, and if a site like Duncan’s actually notices it 

and drives people to watch it, you can actually get a bill for the 

resources that your site has spent to serve that video to people that 

simply come along and want to see it that not only may cross that 

threshold considerably, the bill may come in after the election, and 

you have no control over it whatsoever. You simply put up a little 

video, 30,000 people come and watch it, and you get a bandwidth 

bill from your hosting company for $3,000, which is higher than all 

these contribution limits. 

So there are costs out there that even if the Commission says 

once you spend past this, there are costs you simply cannot control 

at all. 

Mr. BLACK. I mean, just to add, I think if we start placing value 

on a link or an endorsement on a hot traffic site, once we start 

thinking about anything on the Internet in terms of in-kind contributions, you basically shut down political speech on the Internet 

in its entirety. It would be over. 

I do not see how in practice it could be done. Even if it could be 

done, it would just have an extreme chilling effect. No one would 

bother because it would be impossible to know when you cross 

some threshold of traffic or directed traffic or receive traffic. It 

would just be absolutely impossible. 

Mrs. MILLER. Thank you, Mr. Chairman. 

The CHAIRMAN. I surely appreciate both of you coming here 

today. I appreciate what you do and the effectiveness of the blogs 

in this issue. We talk about this issue and Mr. Elhers and I were 

just talking, and all of a sudden you go in circles because it starts 

with regulation somewhere in the campaign law. And all of a sudden, it goes back and you know to the Internet. It is just like an 

endless discussion. I think also technologically it would be so difficult—and you made a good example. It would be so difficult to 

find out who—you know, how many people you are talking to. Does 

that count as in kind? It is mind-boggling to think we could go in 

that direction to try to regulate that. 

And with that I have no more questions. Mr. Ehlers, do you have 

any? 

Mr. EHLERS. I would like to know how to get on your list. 

79 

The CHAIRMAN. And thanks again and please blog us nicely tonight if you can. 

Mr. BLACK. Certainly. 

Mr. KREMPASKY. Yes. 

The CHAIRMAN. On our last panel, we are fortunate to have with 

us three highly qualified election law experts who explain what 

they believe would be the implications of regulating or not regulating the Internet through campaign finance laws. 

First we will hear from Professor Bradley Smith, former Chairman of the FEC, who now teaches election law at Capital University in Ohio. 

Then we will hear from Karl Sandstrom, of counsel for Perkins 

Coie, and also former member of the FEC. 

And our final witness of the day will be Lawrence Noble, who 

serves as Executive Director of the Center for Responsive Politics. 

Mr. Noble previously served as General Counsel at the FEC. 

I want to thank all three of you for being here, and we will start 

with Mr. Bradley Smith. 

STATEMENTS OF BRADLEY A. SMITH, PROFESSOR OF LAW, 

CAPITAL UNIVERSITY LAW SCHOOL, COLUMBUS, OHIO, 

FORMER CHAIRMAN, FEC; KARL J. SANDSTROM, COUNSEL, 

PERKINS COIE, FORMER MEMBER OF FEC; AND LAWRENCE 

NOBLE, EXECUTIVE DIRECTOR AND GENERAL COUNSEL, 

CENTER FOR RESPONSIVE POLITICS, FORMER GENERAL 

COUNSEL OF FEC 

STATEMENT OF BRADLEY A. SMITH 

Mr. SMITH. Thank you, Mr. Chairman. I would like to thank the 

members who have joined us today for part or all of the hearing. 

It is a pleasure to be here and be back here in the capacity in 

which I previously testified as a private citizen exactly 1 month 

today. 

I want to begin by talking about the scope of the issue, I think 

which is not fully understood, the potential threat, and then a little 

bit about the press exemption. First let’s talk a little bit about the 

scope of the issue. 

What needs to be understood is that if you enact Pence-Wynn, 

if Congress were to pass Pence-Wynn, essentially you would be 

passing the exemption that has been on the books now and remains on the books even in light of the court’s decision in this 

Shays-Meehan case because that regulation remains in place until 

the Commission writes another. 

And as we think about that we begin to realize that in fact even 

now the Internet is not unregulated. Indeed I would suggest that 

Congress might want to consider taking steps to further deregulate 

the Internet. 

Earlier you heard the Chairman, Commissioner Thomas. My 

friend made some comments about the amounts that were spent on 

Internet ads in the last campaign. He estimated it from one source 

of 14 million. That was about three-tenths of 1 percent of what was 

spent overall. 

But what is interesting is then he cited a number of figures that 

political parties and other groups had spent on Web and Internet 

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and e-mail and so on. Well, how did he know that data? Because 

that is regulated activity already and it had to be reported to the 

FEC. 

In other words, even under Pence-Wynn, corporations cannot 

generally advocate the election or defeat of political candidates. Political parties and political candidates are still regulated in the 

money that they can take in and then use to spend, whether it is 

for Web activity or anything else. So it is a mistake to think that 

the Internet under the exemption either was or is unregulated or 

that it would be unregulated if you enact Pence-Wynn. 

Secondly, it is worth pointing out that there are people who definitely want to regulate it more. I very much appreciate the comments of my former colleague, Commissioner Weintraub and the 

light-handed touch that she has brought to this issue. I think she 

has been very sensitive to the concerns. But I disagree with her 

when she makes a statement that no one wants to regulate the 

Internet or unpaid blogcasting and bloggers. There are clearly people who want to regulate the Internet and want to regulate unpaid 

ads as well. As Vice Chairman Toner pointed out, the court decision is not limited to paid advertising, and indeed arguably paid 

advertising is already regulated. 

The exemption could be read in the same way as the current 

press exemption. If you read the press exemption literally, any 

broadcast commentary is exempt. And that would mean a commercial. But no one has ever interpreted this as applying to paid ads. 

But if we go beyond that and look a little bit at the notion of 

whether or not we want to limit it to paid ads, I just want to cite 

to you the comment submitted to the FEC by the primary House 

and Senate sponsors of the Bipartisan Campaign Reform Act, or 

BCRA. 

They wrote, ‘‘the proposed rules’’—this was the FEC’s proposed 

rules—of ‘‘retaining a broad exemption for Internet communications with the single exception of paid political advertising is an invitation to circumvention.’’ 

So clearly, there is more than just paid advertising on the table, 

and people should not be lulled into thinking that that is the only 

goal of those who are pushing for more regulation here. 

I think the scope is also not understood because of the fact that 

Web entities, people acting on the Web are still regulated if their 

activities amount to expenditures or contributions. 

And there are a number of issues that go there. We have talked 

a little bit today about small, incorporated bloggers and that type 

of thing. There is also the issue of how one values that. And that 

has come up from time to time. I think it is worth noting here only 

that at least in some circumstances the FEC has valued expenditures not by the amount actually spent, but rather by the perceived 

value to the campaign. And if that is the case, then a link which 

might cost just a few cents to be done could have a value to the 

campaign of many thousands of dollars. 

And now, the Commission is not always consistent in that type 

of application. And so perhaps it could be handled through some 

type of rule. But again to the extent that we don’t want to rely on 

forbearance of the Commission there may be some value in Congress acting. And it is worth noting when we talk about the ComVerDate Aug 31 2005 09:09 Oct 28, 2005 Jkt 024061 PO 00000 Frm 00082 Fmt 6633 Sfmt 6602 E:\HR\OC\A061.XXX A061
81 

mission being light handed, light in touch, that there are four seats 

that are up for reappointment on the Commission. And the regulatory lobby, the same people who say we don’t want to limit this 

to paid advertising, are lobbying very hard to have commissioners 

on board who will be more regulatory than the current set of commissioners. So we can’t kid ourselves about that. 

I want to conclude with just a couple quick thoughts about the 

press exemption because again there has been some confusion 

there. The people talk about the ‘‘Halliblogger.’’ ‘‘It would be a horrible thing, a big corporation could have the press exemption.’’ I 

want to point out that Halliburton, to use an example, already has 

the press exemption. And so do all kinds of big corporations. You 

see, the press exemption isn’t based on who you are. It is based on 

what you do. And so if you are the Philadelphia Inquirer, you have 

the press exemption. And you have it even though the owners of 

the Inquirer are giving hundreds of thousands of dollars to the 

Democratic candidate for Senate in Pennsylvania, it appears, even 

though they announced last year that one of their primary goals 

was to elect John Kerry and they used their newspaper relentlessly 

for that purpose. 

Sinclair Broadcasting is a corporation and it is not a small one, 

and it already has the press exemption. And last year it ordered 

all of its stations to run a documentary that many people viewed 

as simply a long anti-John Kerry commercial. It ultimately backed 

off that. But it shows that corporations can already do these things, 

and they do. And they are powerful and they are influential. 

And Halliburton can start a newspaper or buy a radio station 

any time it wants. What is different about the Web is that you 

don’t have to have that kind of money. You need a lot of money 

to get the press exemption by starting a newspaper or a radio network or a TV station. But you don’t need a lot of money to start 

a successful Web page. And so I think it is important that we keep 

that in mind and not be distracted by the red herring that somebody else might, you know, gain the press exemption. 

The press exemption is available to any American who engages 

in press activities, and I don’t think it is clear that the Internet is 

covered by that press exemption at this time. And I think it would 

be very valuable if Congress were simply to add to the two parts 

of the act that include the press exemption. It now says ‘‘by periodical or broadcast,’’ ‘‘distribute through periodicals or broadcast,’’ 

to simply ad ‘‘or through the Internet.’’ That would make clear that 

Internet sites do have the press exemption. And there would still 

be limits on it just as now, for example, we don’t interpret the 

press exemption as getting to paid ads. We don’t have to interpret 

that for the Web, but we could in that way give people a great deal 

of insurance that their basic editorial content they want to put out, 

whether they are in a blog or whether they are in a Web forum or 

however they want to do it, would be protected. 

Thank you very much and I look forward to questions. Thank 

you. 

[The statement of Mr. Smith follows:] 

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The CHAIRMAN. Thank you. 

Mr. Noble. 

STATEMENT OF LAWRENCE NOBLE 

Mr. NOBLE. Thank you very much, Chairman Ney, and members 

of the committee. I appreciate the opportunity to appear before you 

today. 

It is beyond doubt that the Internet is changing the way that we 

do politics in this country. It is really a transformative tool. When 

television came in over 50 years ago, it also changed the way we 

did politics. But television has a very high threshold for entry, and 

that threshold is so high that most of us have been left as observers and not participants in the debate. 

The Internet is different because it does really allow a vast segment of society, though not necessarily everybody, a vast segment 

of society, to have access to what is a very large loudspeaker. But 

I think it is a mistake to assume that just because political activity 

on the Internet can be undertaken for very little money that it will 

not be used as an avenue for spending large amounts of undisclosed soft money, money from corporations, from labor unions that 

is spent in coordination with Federal candidates, also soft money 

being spent by State party committees where normally a mixture 

of hard and soft money would have to be spent. 

And when that type of money is spent by corporations and labor 

unions on the Internet, it poses the same potential for corruption 

and apparent corruption that you see in television ads, that you see 

on the radio or in the newspapers. 

Now there has been some talk here about drowning out voices, 

and that since everybody can get on the Internet, most people can 

get on the Internet, there is so much room that individuals will not 

be drowned out. But the reality is the Federal Election Campaign 

Act is not about equalizing voices. The Supreme Court has said 

that, that the laws are not about making sure everybody has the 

same access. What the laws are about is stopping apparent corruption from the large aggregations of wealth. 

The law is also not about the effectiveness of the ads. I would 

suggest that if the law was about the effectiveness of the ads, some 

party committee ads and even candidate ads, they could probably 

go unregulated. I think one of the fundamental ironies that runs 

through this debate is that we are hearing a lot today from people 

who are saying that because the access to the Internet is so easy, 

because you can get on the Internet and spending such little money 

that there is no need to regulate the Internet. 

But the fundamental irony here that is what we are really talking about is access by those with large aggregations of wealth. 

What we are talking about is access by corporations and labor 

unions who can spend a lot of money on the Internet. And for those 

who are saying that, you know, people are not spending money on 

the Internet, Chairman Thomas was correct, the Daily Kos has a 

place where you can sign up $50,000 worth of ads, though I will 

give them credit they said they have not been unable to sell that 

yet. But ads are being sold on the Internet. 

If you go on a lot of commercial Web sites or newspaper Web 

sites you are first now hit with very sophisticated ads that are in 

100 

effect videos. Now these are commercial ads that I suspect cost a 

fair amount of money. Andas more and more commercial interests 

find it effective to run expensive ads on the Internet, I think you 

are going to see more and more candidates, more and more political 

parties, and more and more interest groups deciding it is effective 

to run political ads on the Internet, and run them when they are 

very sophisticated and where they are very expensive. 

But it doesn’t mean that we should regulate everything on the 

Internet, and nobody is trying to regulate everything on the Internet. As it stand now the Federal Election Campaign Act has exemptions and the FEC’s regulations have exemptions, and the FEC 

is working on further refining them, that allow individuals to set 

up blogs and say whatever they want. Nobody is talking about 

going after this. It hasn’t happened. It is not going to happen. 

First of all, there is a definitional exemption if you are not 

spending any money. So for those who say, well, you can do so 

much without money, without spending money, then the answer is 

then you don’t come under the campaign finance laws. There is 

also volunteer, the individual volunteer exemption that allows individuals to get on their computers at home, in the dorm room, in 

some ways at their work and blog to their heart’s content and talk 

about which candidates should be voted for, and in fact they can 

coordinate that activity with the candidates. So in that sense it is 

no different from handing out leaflets, and people right now do that 

without having to hire lawyers. 

Some of these exemptions can be further expanded to allow people on their Web sites to spend some money on doing sophisticated 

ads or sophisticated graphics, but that is different again than having some labor union come in and working with the candidate and 

paying for that. 

Now there has also been the question of the press exemption. 

The Supreme Court in 1990 said media corporations differ significantly from other corporations in that their resources are devoted 

to the collection of information and its dissemination to the public. 

All I want to say here is that the concept of the media and journalism is changing. There is no doubt about that. I think this is 

a debate in some ways that has to be had with journalists participating. But if you say that every blogger is a journalist or everybody now with a computer is a journalist, effectively what you have 

said is that there is no special profession of journalism. Maybe that 

is the end result of this. I wonder how that is going to affect shield 

laws in the State. I wonder when a blogger is subpoenaed by the 

government for something totally unregulated whether they are 

going to try to take a shield law and whether or not a court will 

accept it. 

And one final point. It is not—and I think Congressman Lofgren 

said this. You cannot say the Internet is not regulated. Copyright 

laws are enforced on the Internet. Tax laws are enforced on the 

Internet. All we are talking about here is enforcing the campaign 

finance laws which deal with the spending of money on the Internet. 

Thank you. 

[The statement of Mr. Noble follows:] 

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The CHAIRMAN. Thank you. 

Mr. Sandstrom. 

STATEMENT OF KARL SANDSTROM 

Mr. SANDSTROM. Thank you, Mr. Chairman, members of the committee. When you are the last witness on the last panel you are 

reminded of what Congressman Udall once said, everything has 

been said but not everybody has said it. 

So I will try to say something a little different and I may start 

with something that the aging regulator and the New York Times 

might find fairly shocking. I believe that the Internet is entitled to 

greater protection than the traditional media, and I think that previous panel is a good example why. The previous panel of bloggers 

didn’t get their job from Rupert Murdoch or the Sulzberger family. 

They are not employees of NBC or Disney. 

The traditional media is concentrated power. The Internet is dispersed power. The traditional media has high entry costs. The 

Internet has low entry costs. These differences make a difference, 

and the Internet should be treated differently because of the wonderful role it has played in democratizing our politics. 

You know, I have heard some nonsense here today. But nonsense 

sometimes dressed up in legal analysis is no more than a clown in 

a bow tie. For example, I have heard that somehow there was a 

complete exemption for the Internet put into the Commission’s regulations. In many ways I am for a broader exemption, but that was 

never the case. For example, a labor union could not pay for a candidate’s Internet ads. That is not permissible under the current 

law. It is not permissible because 441(b) prohibits it. 

All there was was an exemption from the definition of public 

communication. Yard signs are exempt from public communication. 

But not a single member on this committee would ever go to a corporation in their district and say purchase yards signs for me because they are not a public communication, and you can use your 

corporate money for that purpose. 

That just is not the case. That is not the law. And no amount 

of obfuscation can make it the law. 441(b) is a ban on using corporate and union funds in connection with an election, the purchase of ad space that is expressly advocates election or defeat if 

a candidate clearly falls within that prohibition. 

Now, this committee and the Commission will fund most of its 

efforts—if it chooses to go down this wrong path—to regulate the 

Internet will be a failure because it can’t quite get a hold on what 

they are regulating. Are they regulating a library? Are they regulating what books you can go to and check out at Google? Is Google 

a media entity? If Google is a media entity, why would a blogger 

not be a media entity? But a blogger is just someone using a particular type of software. Why isn’t my 14-year-old son a media entity since he is capable of putting up a Web page? 

Don’t think of it as a media entity because it is not. It is not the 

Fourth Estate. It is the Fifth Estate. It is a new power center, and 

you have to grapple with that power center. Yes, people will lie on 

that power center. They will slander and they will defame and 

sometimes it will be difficult to find them, and that is going to 

make your lives more difficult. 

107 

But let’s just—for instance when people are afraid of all this undisclosed soft money that may be used over the Internet to promote, support or attack or oppose a candidate, that is an interesting perspective. Given that two of the three groups, I visited 

their Web sites this morning. Two of the three groups who took 

that regulation to court to challenge it have on their Web sites very 

interesting materials about Members of Congress. Remember we 

are using undisclosed money. I find that two of these groups—I 

have to put in the record—make some very critical comments of 

members of this committee by name, distribute this to the press, 

make it as widely available to anyone who has access to a computer, which is more and more every one of us. 

The other thing I would like to point out is how difficult your 

task is going to be. Right here I click that on, this is where you 

want to place disclaimers? That is CNN. If I put a, you know, banner ad on that, tell me how big that banner ad is going to appear 

on that screen. 

And don’t forget that almost everything I get on the Internet is 

something that I as an individual citizen went out to retrieve. I 

sought the information. And maybe not information you want me 

to hear because it is critical of you, but I am the one as an individual citizen. And if I want to give it to my neighbor and my 

neighbor is across the country, in that virtual community that has 

been created I should have that ability. 

And so I think most of what you see here today and those who 

say that the Commission went too far, the problem with the Commission, is it didn’t go far enough. 

[The statement of Mr. Sandstrom follows:] 

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The CHAIRMAN. Thank you, all three, for your testimony. 

There has been a lot of discussion about the media exemption, 

and it goes back to something all three of you said maybe in different directions or maybe you all feel differently about it, but it 

is well established and I think generally accepted by pretty much 

everyone that the friends of the media can say whatever they want 

about politics and campaigns and spend as much as they want to 

in doing so. And they don’t have to worry about getting a knock 

at their door from the FEC, no matter who owns it—Disney or 

whoever. They will never be asked to explain why they chose to 

write something—whether they have relatives that lobby. Relatives 

get mad at Members of Congress, next thing you know a reporter 

does an article. You know we can all make up or talk about a lot 

of real life things that go on. So they will never be asked to say 

why they, in fact, wrote something because it was a relative that 

prompted them into doing it. 

So there are a lot of issues in play. Now, when you look at that, 

and again we don’t have the FEC looking at them, so what would 

make the internet any different that we should start saying, ‘‘Well, 

the person that started that blog is related to somebody, and they, 

you know, received money from a union or corporation.’’ I think you 

understand my point. 

What makes a second tier that we start to regulate the Internet? 

Mr. NOBLE. Mr. Chairman, if I may start, first of all, I think it 

is more accurate to say that the media or the press is not regulated 

when they are acting in their press function. And the courts have 

said this. And the classic example used was that the New York 

Times can editorialize and say vote for John Kerry. It cannot take 

out an ad on TV that says vote for John Kerry, and it cannot take 

out a billboard that says vote for John Kerry. It has to be acting 

in its media function. 

Also, they can’t be owned or controlled by a political party. So 

there are limits on the media. And likewise when they talk about— 

we have heard a lot about NBC is owned by General Electric and 

all the companies that own media. General Electric doesn’t get the 

media exemption for its other activities. NBC gets the media exemption. So I just want to say we are talking about them being 

functionally working as the media. 

When you are talking about the Internet, there is no doubt that 

there are a lot of Internet entities that fall into the media exemption. Some of them have offline newspapers, obviously New York 

Times is on the Internet now. Some exist only on the Internet such 

as Slate. 

The question that keeps coming up is bloggers, and I think 

bloggers really present a different issue. There are some bloggers 

who probably fall within the media exemption. But there also are 

a number of bloggers I think who do not fall into the media exemption. But more importantly you don’t need to reach that because 

they are not related to this individual activity. They are not regulated because there is no money being spent on it. 

Mr. SANDSTROM. But that is just not the case. We have heard 

there is money being spent on blogs. And if the Daily Kos wants 

to give me a regular piece on its site for nothing, a regular ad, I 

will probably accept it. Others have to pay for it. 

116 

So it isn’t the case. There are many different business models for 

blogs. And I will show you how even what a traditional category— 

we talked a lot about advertising. But what is advertising on the 

Internet? Is a sponsorship of a Web site advertising? If I like what 

one of the former bloggers is saying, if I send him a gift, is that 

advertising? Sponsorship? Is that something that is now subject to 

regulation and may transform the degree that they are going to be 

regulated? And when is a blogger acting in his blogger capacity? 

The CHAIRMAN. We are not regulating the blogs. 

Mr. SANDSTROM. But what is a blog? It is a particular type of 

software. So I am opposed to essentially regulating almost anything that occurs on the Internet. One, it is a futile effort. And two, 

it undermines the most democratizing technology that has come 

along, more democratizing than television or radio, and maybe even 

more so than the telephone. 

Mr. SMITH. Perhaps I can add, as Commissioner Sandstrom says, 

there is a very low monetary threshold in the law. In fact, small 

amounts are spent. Many blogs now, many Web sites again, I kind 

of use blog generically for whatever is developing on the Web in the 

context of this debate. But many blogs now ask people for some 

kind of contributions: Please contribute to help me do this, find the 

time to pay for some space on the Web, and so on. 

Andrewsullivan.com has such a link. Steve Bainbridge, who runs 

a pretty popular blog called Professor Bainbridge, does that. 

Now if these guys collect over a thousand dollars from these people through the PayPal accounts, do they become political committees? They are spending over a thousand dollars. They engage in 

expressly advocating the election or defeat of candidates. And it 

would seem that they are political committees. 

So I just don’t buy this notion that there is—you know, don’t 

worry about it, don’t worry about it. I will feel more comfortable 

when people are specific about what not to worry about. 

Again it seems like we hear two sides of things. Whenever we 

are in a public forum where the press might be there we hear a 

lot of soothing words about how no one wants to regulate the Internet, and then we get comments to the FEC saying, ‘‘well, that’s a 

mistake when you only go after paid advertising, that is a mistake.’’ We get soothing words in the press release and then we get 

the brief that just goes into court and isn’t going to be seen by most 

people that describes the Internet, deregulated Internet as, ‘‘a poison pill,’’ ‘‘a loophole,’’ ‘‘a step backwards,’’ ‘‘anti-reform,’’ ‘‘the favored conduit for special interests that undermines BCRA’s aims,’’ 

an avenue that opens—‘‘a medium that opens an avenue for rampant circumvention for all of BCRA’s central provisions.’’ 

We sort of are hearing two things. When we had the hearing at 

the Commission, three of the groups that lobby for more regulation, 

including Mr. Noble’s, made a suggestion to us that we consider exempting the first $25,000 that you spend. I did not ask this question to Mr. Noble. I did ask it of the counsels for the other two 

groups that appeared before us. ‘‘Do you think we actually had the 

authority to do that?’’ And both of them said, ‘‘well, no, we don’t.’’ 

So they are telling us you can do this. It makes them appear 

very moderate and laid back. And then I asked one of those two, 

‘‘Well, if we did do this, would you promise not to sue us?’’ And he 

117 

pointedly refused to promise not to sue us if we did pass the regulation that he was recommending we consider passing. 

So there are some real issues here, and I think that I agree entirely with Commissioner Sandstrom’s point. I think he has put it 

out very well. But it is a mistake to say the Internet is already unregulated. That is not true. It is a mistake to say that if PenceWynn is passed it will be unregulated. And when we hear all the 

soothing words, just for me, you will have to make your judgment, 

but I find myself feeling rather suspicious. 

Mr. NOBLE. If I may respond to that, I think Mr. Smith is painting with a rather broad brush and ignoring a lot of very well stated 

distinctions that were drawn over time. First of all, we do think 

you need to be specific and we think the FEC needs to be specific, 

and we have talked about specifics. 

With regard to the paid advertising issue, I believe that was in 

the context of saying that if you go only on paid advertising, State 

party committees who don’t pay for their own advertising on their 

own Web site are going to be able to use soft money for advertising 

on their Web site. 

The $25,000 issue is an important one. There is a question of 

whether there should be a threshold to allow use of Adobe software 

on your own Web site, to spend a lot of money on your own Web 

site to put up your own material. And we said, yes, and a $25,000 

threshold may be appropriate. And we also said that the FEC may 

not have the authority to do that. And maybe they should go to 

Congress to do that. 

And we are not saying that the whole Internet should be regulated. What we are saying is that the spending of coordinated 

money on the Internet in certain circumstances should be regulated. We acknowledge that a lot should not be regulated and a lot 

naturally will not be regulated. 

So I don’t think this is painting with a broad brush. There are 

two sides. One group says regulate everybody on the Internet, 

break into everybody’s home and see if they are on the computer, 

and the other side wants total freedom from regulation. I don’t 

think that is really accurate. I think there are more nuanced approaches than that. 

The CHAIRMAN. The bells are ringing, so we have five minutes 

for each of the members. 

Ms. LOFGREN. I will be very quick. I think as someone who has 

always resisted the heavy hand of government on the Internet this 

has been a very useful hearing and of course it is correct the ordinary laws still do apply. The libel laws still work if it is online, and 

copyright laws are enforced and antitrust laws still exist. But the 

issue is you don’t single out the Internet for special types of treatment. 

And as I have listened to all the witnesses it has become clear 

to me that we would just be opening up—this is a mess to try and 

do that. The one question that remains in my mind—and I am not 

suggesting that we should do this—but I would like people to think 

about it and maybe even jot some notes to me after the hearing— 

is whether a distinction should be made between publicly traded— 

for example, a Google that is in my district, it is publicly traded. 

They have a different relationship to the online world than the 

118 

Daily Kos. I am not suggesting that that should be a subject of regulation. But I am just wondering what your thoughts are on it. 

Mr. SANDSTROM. My thoughts are that Google and Yahoo are a 

greater threat right now to freedom on the Internet than the government is, and I think Yahoo’s activities in China demonstrate 

that. I think they are driven by profit, and that is fine. That is how 

they succeed. That is how they employ many people in your district. But they are—with respect to—because they are the creators 

of the architecture that allows, you know, the suppression of speech 

in some of these countries I think worldwide, they pose a greater 

threat than anything the FEC— 

Ms. LOFGREN. For example, if Google wanted to, and they never 

would do this, they could make sure that all traffic that Google 

flows through a particular site, and if you type in Republicans it 

goes to the DNC instead. Should that be or should it not be the 

subject of inquiry? 

Mr. SANDSTROM. If they started doing it then certainly it should 

be because, like I say, they are the greater threat. 

Mr. NOBLE. I would agree that if something like that happened 

there may be a need for inquiry. But a lot has been raised about 

bloggers who incorporate for liability purposes and whether they 

would fall under the general corporate prohibitions. 

Ms. LOFGREN. They are not publicly traded. 

Mr. NOBLE. They are not publicly traded and they are really corporations for very limited purposes. Most of them say they are not 

profit making, though maybe they would like to be. But I think the 

Congress could very well come up with a equivalent of what is 

called the NCFL exemption in the law right now, that the Supreme 

Court added, which is to say there is a certain class of corporations 

that are—or a certain class of blogs that are incorporated for liability purposes only that don’t fall under the corporate rules. 

Ms. LOFGREN. Maybe just those are subject to SEC jurisdiction. 

I am just thinking out loud. 

Mr. SMITH. I would just say, Congresswoman, I think you raised 

a good issue. As Commissioner Sandstrom says, if that was to happen it might be regulatable and there are a number of different 

statutes I would suppose. 

The point I would make is that if we don’t extend the press exemption broadly, we are oddly enough in a situation where the scenario where you say who could be protected under the press exemption, because who is going to get it? The Washington Post and 

the New York Times Web sites clearly get it. Probably Slate and 

Salon. Well, Yahoo’s Web site looks an awful look like an newspaper, too. So they would be much more likely to spend the resources and have it look clearly like a newspaper and get the press 

exemption than would Duncan Black. That is the question. Do we 

want to extend the press exemption to Duncan Black? And that is 

the question that the reform community doesn’t want to answer. 

And I think they don’t want to answer that because I think their 

answer is no. 

Ms. LOFGREN. Which I disagree with, and I am wondering is 

there a limit or is there not? Given that, that is the second bell, 

I will yield back and let Mr. Ehlers—— 

119 

The CHAIRMAN. I want to thank the gentlelady. The gentleman 

from Michigan. 

Mr. EHLERS. Thank you, Mr. Chairman. I will be very brief. I 

have no questions. I just want to say it has been very enlightening 

hearing the discussion and I am very pleased with the panels you 

have put together. I found some issues have been clarified my for 

me, others have confused me, which is probably appropriate. 

It is a very complex issue. You have certainly given us things to 

think about, and I went to thank you for being here. 

With that, I will yield back my time. 

The CHAIRMAN. I want to thank the Members, staff of the ranking member and our majority staff, and the witnesses of all three 

panels. I think it is a baffling issue in the sense everybody gets a 

little confused, but I think it is a very important issue. 

And with that again, I want to thank all witnesses. I ask unanimous consent that Members and witnesses have 7 legislative days 

to submit material for the record, that those statements and materials be entered in the appropriate place in the record. Without objection, material will be added. 

I also ask unanimous consent the staff be authorized to make 

technical and conforming changes in all matters considered by the 

Committee of today’s hearing. Without objection, so ordered. 

And we have completed our business for the hearing. Thank you. 

[Whereupon, at 11:35 p.m., the committee was adjourned.] 

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