This file contains the entire archived live captions from the Federal Election CommissionÕs two-day Internet Disclaimers Rulemaking Hearing held on June 27 & 28, 2018. This file is not a transcript of the meeting, and it has not been reviewed for accuracy or approved by the Federal Election Commission.


>> I would like to welcome everyone to the commission hearing on proposed changes to the disclaimer rules for Internet communications and the regulatory definition of public munication. Proposed rules were included in the noticed that was published in the Federal Register on March 26, 2018. The NPRM contained two sets of changes to the disclaimer roles. Both proposals addressed disclaimers on public medications on the Internet that contain advocacy , solicit contributions, or are made by political committees. Both proposals would continue to require disclaimers for Internet communications and both would allow certain Internet communications to provide disclaimers for alternative technology. The proposals differ in their approach. We also posted on the commission website sample Internet ads showing how the proposed disclaimer roles would work in practice. We have copies of those at the back table. We may reference them today at the hearing. I would like to thank our staff in the office of General Counsel for the hard work on the rulemaking. Thank you to all of you. And to all the people who took time to comment on the proposed rules and especially those who came here to give us the benefit of their practical experience and expertise on issues raised by the proposals. I want to describe briefly the format we will be following for the next two days. We expect to have a total of 18 witnesses, who were divided among five panels. We will hear from three panels today and to panels tomorrow. We have allotted 1 1/2 hours for each panel today and one hour 10 minutes for each tomorrow. Each witness will have five minutes to make an opening statement. We have a light system at the witness table to help you keep track of time. The green light goes on when you begin, when there's one minute left, the yellow light comes on and the red light comes on it is time to wrap up the remarks. The balance of the time will be reserved for our question for the commission. The questioning will not be formal. We will go with whoever has questions and we will do our best to allocate the time among all four of us. We plan to break for lunch after the first panel. The hearing will resume with the second panel beginning at 1:00. Please keep in mind if you leave the room you have to go through security again when you come back in. I understand some colleagues may have opening statements. We will do that in a moment. As soon as we finish we will begin with the first panel. I will introduce you after opening statements. One thing I want to add speaking for myself today, I appreciate all the comments we have received. They were incredibly helpful and very illuminating and it has helped me in my thinking on how to move forward on this important rulemaking. I know we all share the desire to come up with a rule in this case. I know we will work hard together to try to do so. I am looking for a clear objective and an administrable standard that is platform neutral and tells advertisers how to go from a requirement of a full disclaimer on the face of the ad to an alternative disclaimer or indicator. When I say indicator, I mean something that has a sensitive symbol on the face of the ad that lets the reader know there's a disclaimer one easy click away. That standard is really important for determining how to move forward. We proposed one in alternative B. We proposed a 10 percent objective standard. It wasn't well-received for a variety of reasons because often when you put an ad on what platform --one platform the numbers are different depending on what you use. For that reason and others it wasn't as well received as we helped. My goal, is to try to come up with something that is administrable, clear, and objective. If we can't do that, I think it means a different type of outcome. That is something I am certainly looking forward to talking to all the witnesses about today. Do you have an opening statement ? 

I do. I want to echo the chair and welcoming everyone today. I am very excited to learn what everyone has to share with us today. I want to thank so many people for their participation so far. 160,000 Americans weighed in with us on the NPRM. That is quite a testament to how important Americans think this issue is. I share their concern and their enthusiasm. I think every person who took the time to do that. I want to thank my colleagues in particular the Chair who worked diligently with me on this. I value that. I also want to thank the staff and particularly thank some of the folks in the office of General Counsel who put in and --an enormous amount of time. Particularly Erin who was going to leave us but has agreed to stay through the week. We will miss you and you have done incredible service to the agency and the country and we appreciate you hanging in there to get us through this week. I want to thank you for everything you did as well as all of your good work for the commission. 

A few words about rulemaking. Right now, the rules say that all public communications are required to have a clear and conspicuous disclaimer. That is not a bad place to start. Public communications include advertising on the Internet. Now some people seem to be confused about how to go about that. I think we know what we are trying to accomplish and the question is how is the best way to get there? To get to a place where the American people have the information they need to evaluate the ads they see on whatever platform they are viewing it on or their phone or desktop or laptop or tablets wherever they are seeing information and they are entitled to know where it comes from. Making sure the voters are informed are one of my strong priorities. Advertising, clinical advertising in particular is moving to the Internet at an astonishing clip. According to the Center for responsive politics, in 2014 digital ads made up less than one percent of political ads pending. By 2018 midterms, it is expected to constitute about 22 percent at a cost of --a predicted cost of $1.9 billion. There is a lot of stuff going on out there. It is important people know where it is coming from. I want to mention in passing that something that is in the background of all of this is the larger political picture out there. We saw a lot of ads placed in the last election by people who were not legally entitled to do so, particularly by foreign powers. That is something that is flat- out illegal. One of the purposes that the Supreme Court has taught us of disclosure rules is not only to inform the public but to deter and detect bad conduct. I hope this rulemaking will help us in our efforts to do so. We want to provide clear guidance because people need to know how to conform with the rules in the best of possible worlds we will write rules that are so wonderfully clear that everyone will know how to comply with them and will do so. That will be great. We also need to enforce the rules in order to provide people with motivation for doing that. There are some key issues we have to address. I think the Chair flag one of them. The issue of the trigger point. What is it that triggers the move from the requirement to have a full disclaimer on the face of the ad versus a in -- an adaptive disclaimer we have to go somewhere else to find the information. That is a key issue we need to address. It's important to me that people have easy access to the information. We received testimony on a low percentage of people who click on links. I think having a rule that ensures that the most information that is reasonable on the face of the ad that it is there. I think that will also be important. I also think it's important to get it right. It's important to do this efficiently. I believe it's possible to get a rule in place this year if we work diligently to do so. I am personally committed to trying to do that. Having said that, I look forward to the testimony we will receive today. 

Thank you. Commissioner Peterson. 

I want to echo what they said thus far. About the efforts of staff. The office of General Counsel did a tremendous job . We are making process. I want to thank [Indiscernible] for the excellent work you did at the agency. You will be greatly missed when you leave. I want to thank everyone for their efforts that got us to this point and for their collaborative efforts. I feel optimistic that at the end of the day we will reach a result that will update our rules to accommodate the new realities of the way online communications changed. And also transform the political process. It's no exaggeration to say that over the decades that transformation has been substantial. For candidates, parties, and actors increasingly rely upon online platforms to communicate with voters and to raise funds while American citizens use Internet resources to gain information about races and issues that influence races and to organize amongst themselves. The use of the Internet as a tool has had a democratizing effect low-cost platforms enable speakers with few resources to communicate to large audiences while at the same time, a seemingly infinite array of resources aid the citizenry and casting informed votes. Overall, the development has not been a positive one. While internets expanding influence on the system has pastes, it has created challenges especially for the commission. As we grapple with how to apply a law that was written with traditional modes of advertising mine. Television, radio, printed media. We are tasked with how to apply the law to speech conducted on computers, tablets, smart phones, and other technology. We've dealt with this issue a number of times plus the commission has considered opinions regarding how federal disclaimer requirements apply to character limited text and small ads posted on Facebook and Google and small banner ads on multiple devices. The current rulemaking on Internet communication disclaimers represent the most ambitious effort in the ongoing process. As we knew --move forward I believe the goal should be first indicating the informational interest for the American people to know who sponsors political ads and second, ensuring online technologies flourish as tools for speech. To meet these goals I believe any rule must be flexible enough to accommodate the numerous devices and platforms by which political speech is delivered and consumed and the rapid pace of technological innovation. I agree with the Chair when she says whatever rule we adapt it must be objective and administrable so those who are subject to the rule do not have to come to the agency for frequent advisory opinions to know what it --is or is not permitted. Today's hearing represent an important step towards adopting the disclaimer recommendation. I am optimistic the commission will be able to commit -- complete the task. I want to echo what I said earlier about those who took the time to submit comments. There were thousands of individuals who felt strongly about this topic to submit comments. I greatly thank those who are willing to testify today to educate the commission as to the legal and technological issues. And how we can best construct a rule that will meet the interests that aren't biased - -advancing the statute while advancing the tools that allow so much innovation in the political realm to flourish without impediment by a regulatory regime which may be slow to adapt to the new realities in the online atmosphere. I look forward to the comments and testimony we received today. I would be happy to answer questions. 

Mr. Walther . 

Once again I echo everything said and therefore this will be short. In preparing for this hearing I went back into the first one that I attended. That was the beginning of a hearing and that communication improved initiative. Here we are nine years later and we were through a lot of new technology and advisory opinions that we tried to work through a number of issues that we are wiser to a large degree. We still have a long way to learn. Now we know where we are now and where can we look to the future and have thoughts about where the next steps might be. We should start thinking about that. For example I woke up this morning and I saw a clip that went on and it gives you a short notice about what happened. Then what do we do? It's a matter of a short time and how we can make sure we do what I think is the key to the agency and that is disclosure. That is the reason we are here. To educate the public. Can we get it out of the political system. There are all these great new innovations that we at the same time need to know how we can still keep the public fully informed . I want to thank everyone who has been thanks. Our staff has been incredible about this. They work together with each other and learn and make suggestions and they come up with a number of interesting illustrations and should provide good comment. Let's get started and again, thank you for being here pick 

Thank you, Commissioner Walther. I would like to introduce the first panel. Mr. Allen Dickerson who is the legal director for the Institute first priest breach. Mr. Brendan Fischer director of the federal reform for the campaign legal Center. Mr. Paul Ryan, VP policy and litigation for common cause and Mr. Ilya Shapiro, senior fellow in constitutional studies at the Cato Institute. I'm told Mr. Shapiro today is your birthday . 

Celebrating like most people in Washington do. 

Thank you for coming. Mr. Dickerson can you get us started today ? 

It would be my pleasure. Good morning to everyone. It's a privilege to join you for this hearing. I thank you for choosing to hold it and for inviting me for appearing. More than 6 1/2 years ago the commission first solicited comments concerning the appropriate application of the existing small item and impracticality objections to the disclaimer requirements for small or character limited advertisement. As a legal matter at the hearing can address only that question. Nevertheless certain people have attempted to transform the rulemaking into a response for political influence. The commission is neither empowered nor competent to meaningfully contribute to that mission. According to the minority party on the House intelligence committee, recent Russian efforts to influence the 2016 general election were overwhelmingly directed at organic social media posts and not paid content. Of the pain content --paid content very little contained advocacy. Only 100 Russian back Facebook ad supported or opposed candidates. This commission has authority over paid express advocacy. Even if it called the hearing years earlier, and use the authority to the hilt, it would have added a disclaimer to some subset of those 100 ads worth perhaps a few thousand dollars. Of course the ads were already illegal as the vice chair already pointed out. As the recent indictments announced documented Russian intelligence agencies were willing to commit multiple felonies including identity theft completely unrelated to campaign-finance . In this response, and other agencies are well equipped to provide the diplomatic, military, and counterintelligence resources required. I suspect no informed person outside the building and very few within it sincerely believe foreign intelligence services will be deterred by this agencies civil enforcement docket. By contrast, average Americans without the enormous resources, can easily be chilled by the commission's action. The risk has long been understood and the more run-of- the-mill context of physical advertisement. Even where disclaimers are possible, they are often excused under long-standing and uncontroversial exceptions. Bumper stickers and campaign buttons could be made larger. Billboards could be repainted, a second sky writing plane could be sent to deliver a disclaimer. None of that is required. The burdens of imposing a bureaucratic script on these campaign speech would render them ineffective, unaffordable, or both. Many speakers are simply forgoing using them. No good reason has ever been given for failing to support this commonsense approach to smaller brief online advertisement. The same policy interests are present. Disclaimers distract from the message and this is particularly true when a speaker's message is brief. The same legal concerns are in play. If it requires disclaimers, that will objectively swallow a speaker's underlying message, the commission will be banning certain forms of political advertisement. Is there any question that campaigns would forgo printing campaigns , bumper stickers, or buttons if they were required to carry the full disclaimer required for printed material. By analogy, is there any doubt advertisers will not run six second ads if they must include online for seconds of mandatory disclaimers. As this commission hopefully proceeds to a final rule it should accomplish three things. First the adopted rule must allow speakers to use any commercially available product they choose. Especially when the product is cheap, readily available, and therefore a prime candidate for use by modest and unsophisticated speakers. Second, it should established a clear line so you know when a disclaimer is required and what it says. Third, and are you really most difficult, the guidance must be flexible to be applied in the future without further rulemaking as technology advances. Thank you for the opportunity to be here. I look forward to your question. 

Thank you, Mr. Dickerson. Next we will go alphabetically. So next is Mr. Brendan Fischer from the campaign legal Center. >> Thank you for holding this hearing and the opportunity to testify. This is a very important issue and as Commissioner Weintraub alluded to, a rapidly increasing share of political spending goes towards digital political ads. In 2012, 1.7 percent of ads spending with digital, this year it's expected to reach 22 percent of ads spending. In the 26 elections both foreign and domestic actors took advantage of the growth in political advertising and the commission's relative inaction on this topic to influence American voters while omitting basic information about who paid for the ads. Digital ads were not only used as a means of encouraging people to vote for candidates, but were also used by foreign and domestic actors as a means of deterring people from voting at all. Disclaimers give voters, and law enforcement tools tools -- to detect and uncover this. Even if the small amount of ads run by Russia that should've included disclaimers which may have been enough for the press and public to uncover this foreign interference effort much sooner. I appreciate the work of the commission crafting two alternatives that ensure viewers of digital ads have information about who is trying to influence them. I will hit a few main principles that should guide the commission's consideration . First, disclaimer information should be delivered in the same format as the communicative comment. Digital advertisements increasingly communicate messages through text, video, and audio. The rule should make clear, disclaimers are required for each component of an advertisement that independently satisfies the statutory criteria. An advertiser running an ad on bus speech not be able to evade disclaimer requirements by embedding a video in an otherwise text a focused ad and only including the disclaimer at the end. Facebook made this point in their comments that mixed-media ads should include a disclaimer on the outside of the ad or the frame of the ad. Both alternatives from my perspective present problems in this regard. As much disclaimer information as possible should be delivered on the face of the ad. Voters should be able to learn who is influencing them immediately upon viewing a political ad online. Depending on the platform it's easy to mistake a paid advertisement for a organic post. As Prof. Kim's comments described voters are overloaded with advertising on digital platforms both political and commercial. Requiring voters to take an affirmative step to learn who is influencing them is very likely unrealistic. Third, any exceptions from on ad disclaimer requirements should be narrow. They should be guided by the objective constraints of the medium. Not the subjective preferences of the advertiser. The commission must be careful not to craft a rule that renders disclaimers optional. If it does, malicious actors both foreign and domestic will find ways of avoiding disclaimers. Alternative A only provides an expection when a disclaimer cannot fit due to the external character or space constraints. We support this approach. Alternative B offers a 10 percent rule. We appreciate the goal of crafting objective standards but we have concerns the objective standard could be gained. It would be largely within the control of the advertiser and also have concerns about the 10 percent ads --as a number. Then finally, we want to make sure one step means one step. We applaud both alternatives for requiring that viewers of ads with adaptive disclaimers need only go one step to require the full statutorily required disclaimer information. The commission should make clear that selecting an indicator on an ad is that one step. Being forced to scroll through or click or otherwise navigate other material in order to find the statutorily required disclaimer information would be a second step. It should be expressly barred either in the rule itself or the justification for it. Thank you. I look forward to your question. 

Thank you, Mr. Fischer. Mr. Ryan. 

Good morning Chair Hunter, vice chair Weintraub. My name is Paul Ryan I'm vice president at the nonpartisan watchdog group common cause. Thank you for the opportunity to testify this hearing. It's and honor --an honor to be before you represent 25,000 individuals who signed the written comments that common cause submitted in this rulemaking last month and representing more than 1.1 million common cause members and supporters across the United States. Americans have a right to know who is spending money to influence their votes on election day. I am here on behalf of common cause and on behalf of American people to fight for that right. Eight years ago in citizens United, an 818 majority of the spring court upheld against constitutional challenge the federal law disclaimer acquirements that issued this rulemaking as applied to two, 10 second TVS. It's worth noting the disclaimer requirement required a text disclaimer on those two , 10 second TVS to be on the screen for a minimum of four second. In other words, the Supreme Court upheld the disclaimer that took for seconds , 40 percent of the 10 second ads at issue in that case. The citizens United reason that disclaimers provide the electorate with information and ensure the voters are informed about the person or group who is speaking the court went on to explain further identification of the source of advertising may be required as a means of disclosure so people will be able to evaluate the arguments to which they are being subjected. At the very least, the disclaimers avoid confusion by making clear the ads are not funded by a candidate or political party. Finally, the Cato Institute five court underscored the promise of more effective disclosure in the Internet age. Explaining back in 2010, the campaign finance system that peers with expected disclosure is not existed today. With the advent of the Internet, prompt disclosure of expenditures can provide shareholders in citizens with information needed to hold corporations and elected officials accountable for their positions and supporters this transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages. The Supreme Court understands that while it is indeed true that the Internet and its communications are different than traditional media, the difference does not warrant an automatic default to less informative disclaimers . On the contrary, a principal virtue of the Internet is the ability to deliver information. The commissions disclaimer role should capitalize on this virtue not undercut it. Yet despite the fact the Supreme Court has explicitly upheld current disclaimer requirements as applied to 10 second TV ads, and has extolled the virtues during the Internet age some argue that applying these is unconstitutional. The Supreme Court settled the matter. The Supreme Court has spoken. The commission should disregard such arguments. Common cause urges the commission to adopt disclaimer regulations opposed as alternative Today in the interim. Alternative A [Indiscernible] to their online analogs in video, audio, text, and graphic advertisement. While allowing use of a less informative adapted disclaimer only when a full disclaimer cannot be included in the advertisement due to technological constraints. Cato Institute four opposes alternative B which would not require them to include the standby language presently required for TV and radio advertisements even though such language could easily be included in most online video and audio advertisement. Alternative B would permit the use of a less informative disclaimer. Even when no intrinsic technological constraints prevent the inclusion of a full disclaimer. I will close my remarks with a quote from the First Amendment the late Justice Scalia from his opinion in the case . Requiring people to stand up in public fosters courage. Without which democracy is doomed. From my part I do not look forward to a society which campaigns anonymously hidden from public scrutiny and protected from the account to mill --criticism. This does not resemble the home of the brave. Well count Cato Institute four and is 1.1 million members of brave members of the Scalia camp . Thank you. I look forward to your question. 

Thank you. The birthday man. Mr. Shapiro. Thank you everyone. It's an honor and a pleasure to appear before you. As you know we are a non- partisan research foundation to --dedicated to free government we've long advocated for the right of citizens to speak freely. Especially about political topics relevant to a democracy. We're not litigators we don't file cases or advise clients . I am a simple constitutional lawyer not a technical political lawyer. My focus will be on the first amendment issues which are central to whatever the nitty- gritty of the rule must be. That is because the vigorous debate on matters of concern lies at the core of the First Amendment. Political speech demands stronger first amendment protection than any other kind. Not lesser. Due to abstract fears of undue influence. To --too often it's that it's related to political campaigns and is more suspect than any other kind of speaker disclosure requirements have the capacity to confuse or add noise to political discussions as much or more as informing voters. After all, what does a disclosure saying this was paid for by the motherhood and apple pie packed really do? Take the infamous Jesus versus Satan digital ad during the 2016 campaign that it turns out was created by Russian hackers. It seems like if that kind of advertising is what swayed the election than adding a disclaimer is not really getting at the heart of what ails our democracy. As the IRS learned, judging organizations based on certain search terms that are disfavored is a dangerous infringement on liberty as well. Any good lawyer will tell you the more extensive the disclaimer, or disclosure the less likely any of it will be read or observed -- absorbed and therefore could be counterproductive to the entire effort. While the Supreme Court has held that disclaimer requirements may be imposed, the burdens of these requirements should be limited to only the minimum required to actually inform the public. All too often, the purpose of disclosure rules and other campaign-finance rules is to chill political speech rather than inform voters or the political debate. As the Supreme Court said in relation to the NAACP's desire to protect its members and Jim Coelho -- Jim Crow Alabama disclosure requirement have to be tailored to the interest because compelled disclosure may constitute a restraint on feed him and association as a curtailment of the right to speak. Just yesterday the Supreme Court decided another relevant case. It touched on the burden of compelled disclosure. During oral arguments three justices addressed the point. Burdensome requirements of the kind issued their were undue burdens that could invalidate the statute two justices that ended up in the dissent yesterday in the final opinion still --they talked about how multilingual requirements should be very burdensome. And one judge said unless it's --Justice Thomas's opinion talked about how a billboard for an unlicensed facility that says choose life would have to surround that statement with a 29 word statement from the government and as many as 13 different languages and so the unlicensed notice drowns out the facilities on message. That is the cautionary tale. We can't have however you draw the 10 percent or 12 percent or eight percent all those technicalities cannot be such that the overall message the ad is trying to convey is drowned or obscured by whatever the disclosure requirement may be. Even this justice talked about that he agreed unduly burdensome requirements may offend the First Amendment. Alternative A is particularly troubling. Those stand by your ad requirement that is not clear what the basis , the statutory authority for this commission to impose this requirement is on Internet ads in the first place. In general we submit rules designed for newspaper ads or not sensibly apply to twitter. Requiring that online media have once designed for media world and vacuums tubes. --Alternative B provides more flexibly but is somewhat [Indiscernible] trimming a square peg of modern online media into the round hole of campaign-finance. Just my final thought. I agree with Mr. Dickerson to the extent the commission feels that should be given we would encourage it to consider the least restrictive means available consistent with the right of free expression and keeping in mind technology is constantly evolving. Less is more. Thank you pics 

Thank you very much to all of you. We will open it up to questions from commissioners. As I said earlier we will try to make sure everyone gets an opportunity. Would anyone like to start? >> Let's jump into a couple of the issues you all raised in your opening statements. Thank you, Mr. Shapiro in particular for coming on your birthday -- 

It was this or the Supreme Court. Either way I was doing something. 

You must really like us. We do not have cake but there will be cookies. I don't have candles. We could sing happy birthday. A couple of issues I think will be key here. One as both the Chair and I mentioned earlier is the issue of when does one go to an adaptive disclaimer. Do we have general agreement that there are some circumstances in which this would be appropriate? Most people are nodding. Mr. Dickerson doesn't like to have disclaimers at all. 

Something oven --an overstatement Mme. Vice Chair. 

The key question will be when does that happen? Alternative A proposes that unless there is some technological impediment you have to put the entire disclaimer on the face of the ad. As we were going back and forth on this and trying to come up with samples, the example was what if the disclaimer could fit but it would take up 95 percent of the ad space? I don't think that was the intention behind that proposal. Then the question is if not that, then what would be the limit? Do we need some kind of metric? On the other hand in Alternative B the 10 percent limit some people said was arbitrary and why 10 percent why not nine percent or 11 percent? As the Chair alluded there were commenters who worried how it could be implemented across different platforms. I think we are open to suggestions for improving either both and come up with a brand-new idea for us. I open it to the panel. Under what circumstances should the commission require that or allow that one could use an adapted disclaimer rather than put the full one on the face of the ad? 

First of all, I will echo some of the comments of Mr. Dickerson and Mr. Shapiro. Technology is dynamic and adaptable and quickly change. The companies like Facebook or Twitter or other platforms can find ways to incorporate a full disclaimer without necessarily limiting an advertises communicative content. We will likely discuss some of the examples that were distributed, applying these rules . These examples are already out of date. Facebook ads are allowing a full disclaimer on the ad itself without limiting what an advertiser is communicating to its audience. I think if the commission were to establish a baseline, that political advertising as a general rule must include a full disclaimer on the face of the ad were at minimum include the name of the advertiser that paid for the ad. The industry will very quickly adapt. I don't know that these are difficult question. I don't know that the industry is unable to ensure that voters have basic statutory information about who influences them. >> I have a few thoughts I would like to offer. With respect to this question, the Supreme Court as I mentioned in my opening remarks, gave us guidance. In the 25 plaintiffs challenged this with respect to three video advertisements. One, 32nd ads and two, 10 second at. As required by the statute, the disclaimer for the ads must be on screen for a minimum of four second. So a four second disclaimer at a 10 second ad, the spring course is perfectly constitutional. Supported by recognized, long recognized interest. Nothing has changed in that constitutional analysis. It was eight members of the Supreme Court that approved the disclaimer that took up 40 percent of the ad. At the very least, I think the commission can look to that guidance as establishing any threshold up to 40 percent as being constitutionally permissible. The proposed regulation in Alternative A which Common Cause supports only allows for the alternative disclaimer, the adapted disclaimer, if the ad cannot fit due to external constraints and cannot fit a required disclaimer. Only then can you move to the adaptive disclaimer. That is the standard in the role. The standard in the example ads is different. I was confused by that. Example number two caught my attention . I think Allen you mentioned in your comments , the analysis for the second ad says does Alternative A require the full disclaimer be used? To. The advertisement can practically include it. Practically isn't in the proposed regulatory text. So Cato Institute for didn't respond to that legal center. It was only in prepping that I gave that a close thought. That is a different standard. I'm not sure what practically means. I like the standing in the rule. Must have the full disclaimer unless there are external constraints that mean it cannot fit the disclaimer. I like the Supreme Court's guidance of up to 40 percent of the ad that would be permissible. 

If I may. There are two threshold question. The first is, the question of how you do Citizens United. Leaving aside the constitutional issue and I think there is a debate about whether the compelled speech aspects of that claim were fully presented in that case. What was presented was --what Citizens United argued was an under breath argument. They said the reason we're complaining is that we have to put these full broadcast disclaimers on but we wouldn't have to do that if they were online. So the reason it reached this leaving aside the constitutional issue I think it speeds clearly to the fact that there is no statutory authority to require claims of Citizens United in an Internet space. I would start there. We explained that in detail in our commas. The second is what's meant by external contract. Her position is the level of external constraints and burden being imposed will depend upon the product that is being purchased. As we make fairly clear in our written comments, full disclaimers are perfectly acceptable and required on the vast majority of clinical ads. This is a small subset of smaller ads where it will be especially burdensome. I guess you could read external constraints in one of two ways. One would not be problematic one would. By external constraints we mean the product we are buying is say a six second ad. The provision of a full disclaimer in that context would be especially burdensome. I think that understanding is fair. To the extent what we mean by external constraints is you could've purchased a different product. Instead of the six second ad you should purchase a 15 second ad. Then it wouldn't be overly burdensome. That's a different understanding of external constraints. The commission to be looking at the analysis of burden and thresholds within the context of any particular commercially available product. >> I would like to answer the question by reversing it. I think the default should be maximal freedom. The question is there a justification for the regulation rather than the default being here is the standard regulation under what circumstances do we deviate? That is in line not even with my political theory or constitutional first principles but graphic designers and psychologist will tell you if there is a blank space surrounding something people's eyes will be drawn to that rather than all of writing or someone talking their way through a video or audio ad or what have you. Think about yourselves. When you look on grocery shopping, you might look in that box about the calories and percentage of sodium. You will not read the rest of the fine print. Similarly with prescriptions when you get the print out at the pharmacy you won't read it. Or the fine print when you are buying a house. Most of us are lawyers here I think at least in the front and we don't read that even though buying a house or car is important and significant. I would tell you that if there is a website or for more information go there. Who knows what technology is advancing. Some little symbol you point your smart phone at cater to what you're interested in. You will have presets. I care more about sodium or sugar or the financing rate or this. Similarly, with political ads, even this front-page basic example where it doesn't look burdensome to have this two line of small print after the actual ad, I would wager it would be more infective -- effective in terms of maintaining voter confidence in the integrity of elections to have the website say or paid for by FEC PAC or FEC.org. Or the symbol that people look that if they cared. Then have these two lines take that up. Let alone if it's a smaller one or these other issues that were discussed. I am obviously not a psychologist or graphic designer but I would encourage you to seek advice from those professionals in addition to lawyers and political professionals. 

Thank you. I appreciate your starting up. This is exactly the kind of discussion I was hoping to have. Thank you to the commenters for entertaining. We just put on the screen , there is a handout in the back of the room if you can't see it. This is a side-by-side of example 2 and example 10. They are printed in the handouts everyone has. The purpose is to try to understand and I think this is a question mostly directed at Mr. Fischer and Mr. Ryan who said they support Alternative A and Mr. Ryan said Alternative A in the NPRM. As you know in the examples, Alternative A is the full disclaimer and not required in example 2. It is required in example 10. I am wondering if you could look at that with the standard proposed by Alternative A which is due to external character or space constraints cannot fit the required disclaimer which must include an adaptive disclaimer. As I said on the outset the reason we proposed Alternative B is because I had a difficult time understanding what does that mean ? How does one determine whether it can fit or not? How do we do this? 

It seems to me that the Vice Chair asked at the onset would you be okay with an adaptive disclaimer and Mr. Fischer and Mr. Ryan out of their head yes. And Mr. Fischer said it would be okay if the name of the pair was on the face of the ad. Again that brings us to how does one decide when to make the change from one to the other? I agree with Mr. Shapiro and Mr. Dickerson that we should start from a different benchmark of what could we do to allow people to express their thoughts as widely as possible on the Internet, while providing the information but may be in a more technological savvy way. I think that is really incorporating nicely in the comments from twitter which they called a visual badge on the face of the paid political communication to make it clear when users see or engage a political ad. They don't provide a specific standard on how to get there. Of course twitter has a smaller platform than Facebook. I think Facebook, you're right, some of what was proposed, Mr. Fischer, has been overcome by vents and Facebook is a different platform. Twitter is basically saying, if you adopt a lot of the rules in both Alternative A and Alternative B, but particularly Alternative A, it will mean that advertisers cannot use a lot of the ads that they are allowing and the ones that I think we all agree are more popular now which are the smaller ads and the shorter video ads. For the two of you do you have any comment on these alternatives and how --why one would be okay and the other wouldn't under Alternative A? 

Yes. I have thoughts on it. I reached a different conclusion to the question posed in the second example. Does Alternative A require the full disclaimer be used here? My answer is yes. I looked at that and said it looks good I can read the disclaimer. It's clear. It's of sufficient type size to be clearly readable. Yes, yes, yes. I don't think there is and impediment to including it as it's present. I think the two examples should be consistent. 

Are you a psychologist or graphic designer? 

I am neither. 

I wonder if --that surprises me that you think it should be required. Obviously it takes up a good percentage of the ad and it's a lot of what Mr. Shapiro was saying. I don't know if he used this exact word but he seems like he said it was a lot of noise. I don't know if it's useful to a person looking through a small ad flipping through their phone. What are the ads the people will read it? I don't believe we have testimony that answers that specific question. We have some testimony that says people may not click through. We don't have anything that tells us whether or not people will actually read it and how useful is that information ? Someone mentioned how much information does it tell you that is paid for by --someone said what did you say ? 

Motherhood and apple pie pack . 

How useful is that type of information on the face of the ad again for the small platforms on the Internet. 

I'm not a psychologist but I am in attorney. I was involved in litigating the Citizens United case. I look back to the court for guidance. The court gave green light to disclaimers that took up four seconds of a 10 second ad. >> It wasn't on the Internet. 

No. It wasn't. There's no reason as I mentioned, to provide less information via the Internet that we have through traditional means. >> What about if it means that people cannot use certain ads on certain platforms? Are you okay with that? 

That is not this example. I'm not sure which example we get to that presents that question. This ad looks legible to me. It looks useful to me. If I were an ad buyer -- 

We will bring up an example in a moment and put it on the screen. But it's example 16 through 18 which is the micro bar example. If you require a disclaimer, it means essentially those ads cannot be run. You literally can't see the disclaimer in examples 16 and 17. At if I could respond to that and something that Mr. Shapiro said. I know is the position of the Cato Institute that markets are wonderful things and they can quickly correct. I think that would be the case here. Advertising platforms have an incentive to make sure that the ads they are selling will be influencing people. That's how they will get political advertisers to be repeat customers and continue coming back and buying ads. It's in everyone's interest that we comply to make sure the ads that are fully compliant will influence voters. That an adequate amount of space will be around the communicative message that voters will be influencing people will look at the ad and click on it if that's the goal. That these entities and platforms will be able to accommodate the requirement that the commission lays down . 

Are you saying that we come up with the requirements and the platforms won't sell the small as to political communities? 

This is a dynamic process. The challenge with applying some of these rules to these particular ads is that they are --this is effectively a billboard. This is effectively a billboard we are sizing down to the Internet. That's not the way digital advertising work. There are a number of different ways that information can be presented on the face of the ad or in the frame surrounding the ad. I am confident that for the vast majority of ads online, the disclaimer information can be presented on the face of the ad without having to limit the communicative content or the overall goal of the ad. 

We have comments from twitter and others that say that is not accurate. Requiring a full disclaimer even a shorter one would diminish the ability for people to run certain ads . 

I nodded my head if you asked if adaptive disclaimers were appropriate in certain circumstances and I agree they are appropriate in certain circumstances. Where it is not possible to include a full disclaimer. 

The standard for you is where it's not possible ? 

Yes. I think where it's not possible and again if you could say this is a dynamic process that can be resolved through advisory opinion requests and --it's a dynamic process that can be resolved through requests and a rigid approach of treating digital ads as smaller billboards is not helping things. >> I think I'm the sole member of the commission that uses Twitter. It's usually pretty flexible. You can have pictures and I've never had a problem linking to everything . There is a variety of ways that twitter ads are susceptible to providing additional information. If you add a picture doesn't even charge against your 280 characters which of course is a choice that twitter decided. It used to be 140. Then overnight it was 280. Maybe tomorrow they will decide is 313. That is the way they design it. I think that -- 

I want it on the record that I think twitter should go back to 140 . [ laughter ] >> I wish twitter had come here to help us. I think it's unfortunate that while they all submitted comments and were generally supportive of our doing this rulemaking and they encouraged us to come up with some standards and regulations. I think it's unfortunate that twitter, Google, and Facebook all decided not to come. I think some questions we have our nitty-gritty technical questions and having those tech people here may have been perhaps even more useful than a panel of constitutional lawyers. I know that's hard to envision. I wanted to throw in that there seems to be an underlying premise in some comments that disclaimers ought to be avoided at all if they could be because they interfere with people's ultimate freedom to say absolutely everything and only those words they choose to say. Disclaimers are already a legal requirement. Nothing in this rulemaking is intended to revoke any disclaimer requirements. That is just not where we are going. >> I don't want to speak for the panelists, but one of the ideas thrown out by the people including twitter is using what we called at the FEC an indicator. As I said twitter calls it a visual badge. I think that's what people are talking about is if not the full disclaimer them potentially something that is a truncated version of it. If not that then some kind of visual badge or an indicator. That would take you very quickly to additional information that many people have said could provide more would be more readily available . I will turn it to others that have question. But one less thing for Mr. Fischer. Are you okay on example number two? You think we should require the full disclaimer on example to ask 

I agree with Mr. Ryan that under the text of Alternative A, this would --the full disclaimer would be required. I think a full disclaimer -- it would be incorrect to say that a full disclaimer cannot be included on this particular ad. I do not know whether -- whether it should be the case. I think the problem with these examples is that digital advertising is dynamic. There will be few ads in the 2010 elections and beyond that are nothing but an image where the disclaimer information will be included within that image. I think the digital platforms and the websites that will be selling advertising will find much more dynamic ways of representing the disclaimer information on the ad. 

You are talking about Facebook? 

Facebook, Twitter, Google, [Indiscernible]. The various platforms that are selling advertising to political advertisers are finding a number of different ways of representing the disclaimer information. >> So you're sitting at the platform requires people to provide it then we don't have to do anything ? 

No. I'm not saying that at all. I'm saying if you make clear that platform --as a default, an advertiser whose advertisement meets the statutory requirements must include a disclaimer , then platforms will make sure that it happens . That platforms will offer ways for political advertisers to comply with the regulations. 

Okay. I don't want to take up any more time. I don't think it's consistent with the comments they submitted. Maybe we can come back to it. 

May I ask a follow-up ? I want to go back to the issue of how much of the ad is it reasonable to expect there to be disclaimer on the space as opposed to using an adapted disclaimer . I hear from Mr. Ryan that we have up to 40 percent would be reasonable under Supreme Court doctrine. I am troubled by the 95 percent hypothetical. Do we agree that even if you could fit it in and if there's some portion of the ad that would obscure the entire ad and it would not be reasonable to require . Would you agree or disagree ? Agree. 

Where do we define the line ? If you come up with a number like 40 percent or whatever we will still have the problems that were raised in response to the 10 percent threshold. What is the difference between 41 percent and 39 percent and how will it transfer from one platform to another ? Putting that aside, how would we make - -how should we make the determination if in your view 40 percent is okay, 95 percent is excessive, do we just call it a day at 40 percent because we have Supreme Court information on it? Is it over 50 percent would be unreasonable because that would take up more than half of the ad space and that doesn't feel right ? How do you make the determination? How do you think we should do that? 

I would encourage you to employ the expertise of some who specialize in how people perceive advertising in communication. I don't know if there were any comments along those lines. Sort of along the lines of what Mr. Shapiro suggested, that this type of science matters. I think I will stick to my area of expertise. The law up to that threshold you are on perfect and solid constitutional grounds. Perhaps you could push the boundary further than 40 percent. My inclination with the Supreme Court is not to do so and I encourage you not to do. I don't have a great answer for the precise number that most effectively communicates this information to its viewers. I strongly suspect there is advertising scientists who do know how to measure that. And could provide that information to the commission. >> You know the breath of comments you received better than I. Did you receive any comments along those lines from those who have an expertise in the social science of advertising? 

Just because it might be legal doesn't mean it's the best way of regulating it. I'm not going from any ideological sense. As I was getting ready to go to work yesterday the TV was on in the background and there was some pharmaceutical ad. I think more than 40 percent and half of the ad was a disclosure about possible side effects . I would think that those disclosures in the pharmaceutical and medical context are more important. Regardless those are very important things that could help people or kill people or whatnot . Wouldn't it be more effective to say there could be serious side effects, talk to your diet --doctor before using it. Rather this whole list. I think there's a similar dynamic going in here. Even if your soul purpose is to inform voters and enhance confidence and the integrity of the election. Something smaller might be more effective for getting all of the ideological principles. 

I think that's a really important point. It is something that I thought about when we crafted the alternatives . Some of what went on was to try to present alternatives so people could have things to compare. Not necessarily that people were locked down on one side or the other. The alternatives take different positions on whether even when you have an adapted disclaimer do you have to have some indication of the name of the sponsor and secondly can it be an abbreviated name of the sponsor. It occurred to me that Alternative A says you have to have at a minimum the full name. I am sensitive to that that may be you would get more --you would actually convey more useful information by having something shorter and punchier that people would read and see and get. I am curious about the --I guess on this question I am particularly interested in the view of Mr. Fischer and Mr. Ryan since the other panelists were in the less is more camp. I can guess where they might come out. Is it okay to have an abbreviated --how do you feel about something that --a requirement that there be some indication of a name versus having a little indicator that says go here to get further information? Secondly where do you stand on abbreviations versus full name? If you are, and I think some of your comments suggested you are okay with that how do we determine what is a commonly understood abbreviation given that in Washington everyone understands what the DNC and the RNC are to take some examples. May be in the middle of Idaho they don't. Maybe it doesn't resonate for them the way it does here in D.C. 

I mentioned this earlier and the most important information that should be included is the name of the advertiser. The name of the group that paid for the ad. I did like an --in Alternative B the tiered approach. Depending on where you set the line maybe it's percent use that for tier 1, if the full disclaimer includes the not authorized committee and website exceeds a certain percentage then you can drop down to the shortened disclaimer. The adapted disclaimer that only provides the name of the advertiser. I think that's the most important information. 

Just let me be clear. Part of the tiered approach in Alternative B is if that's too long by whatever criteria you get to go to just a simple indicator. 

That's where I would -- that is something I disliked in Alternative B. I think if you meet whatever requirements or threshold it is you could use a shortened , adapted disclaimer. The bar should be much higher for not including that adapted disclaimer at all. It should not be 10 percent for both. I think if you have a percentage for tier 1, then for tier to numb it should be closer to an impossibility stander. Much closer to the standard in Alternative A, that if the adapted disclaimer cannot be included in the ad, you can include only an indicator. 

I think Alternative A gets it right on this point. At a minimum you should have the name of the advertiser in an icon that makes clear that additional information is only one step away. At your next panel you will be hearing from Prof. Kim who wrote about this in her comments. She wrote about what she referred to as information overload. Her view is that it is unreasonable and unfair to require viewers to investigate who is behind an ad. The type of investigation that would be required of all you saw was an icon. Her recommendation I believe is at a minimum you should have the advertiser's name plus the icon that alerts you to the availability of additional information. You will also here I believe on the next panel from a representative from the center from democracy and technology which wrote at some length about the challenges faced by the development of an icon in the advertising community around the ad choices campaign. It hasn't really worked well. I found those comments interesting to read. I've been using the Internet as long as I can remember. I have no idea what the ad choices meant. I am a pretty engaged user. So the comments from there resonated with me on that point. The limitations that are presented by an approach that allows advertisers to only use an ICOM and not also include the advertiser's name are serious. I think the public would be poorly served by a disclaimer requirement that allowed only an icon and not the advertiser's name. 

You are okay with an abbreviated name? 

I think that's a slightly tougher question. I am much more comfortable with a disclaimer requirement of an abbreviated name plus icon versus icon only. I've seen examples both presented by the commission and elsewhere of really long committee names. I'm definitely open to this abbreviated name approach. But Vice Chair Weintraub I share your concern that maybe within Washington what may be considered a well-known abbreviation may not be outside of their peers >> I agree. I think we noted that in the comments that the universe of organizations entitled to use an acronym will be small. 

I would add one cautionary note which is that this commission's experience with the advisory opinion process has not been a happy one in this space. To the extent we are adding these ambiguities as to who comes in and who goes out, I think you will see reasonable people on the commission disagree on those points possibly in a way that will land us somewhere closer to where we are right now. With that said, I want to answer a question that was raised earlier which is is there a reason for having less information on a disclaimer on the Internet space then there is any physical billboard or add. I think the answer is obviously yes. We go through this history in our written comments. The original intention of these disclaimers was for noninteractive advertisements whether they were broadcast in someone's living room or found in a newspaper where the only information available about who is behind the sad was in some cases to come physically to the FEC and search through the archives. The idea was to allow people to get at the larger disclosure information that the act requires. The disclaimer itself will not convey the information but should be a key to allow the voter to get to it. Obviously in an interactive space that is far easier that it is in a broadcast ad. Just to take an example . In an Internet ad it's not obvious at all why you should have to include an web address. Given that in almost all circumstances , you will probably be able to click directly on it and get close to that information. I think frankly and maybe this is a question for Congress and the commission but a lot of this is obsolete. It doesn't fulfill the requirements or the --of the original act . 

Or you could input the name. 

This is true. Go to open secret. The intention here is not to convey the information I don't think anyone thinks that. It serves as a key to allow voters to get to disclosure information. That can be done with an indicator. While avoiding this problem of I don't know if certain things are what --well-known in certain places. >> If I could respond quickly in terms of what information the disclaimer provides. The Facebook page is called who is your country? It describes itself as a community who wants to show your pride. It goes about local news about potholes and a Caterpillar plant moving to Indiana. When you look at the fad -- Facebook archive that Hoosier countries running, it says pay for by priorities USA and Senate majority PAC. The Facebook page itself, the name of the page it would appear on does not give you any indication that these ads are being paid for by national Democratic super PACs. I think there's a degree of information that can be provided by including this disclaimer information. >> Mr. Peterson. >> One of the concerns I have which I mentioned in my opening statement was to ensure that low-cost advertising formats remain available to candidates to committees and individuals who may not have the resources of well-financed candidates and other wealthy individuals. I received a comment from Google and they talk specifically about the stand by your ad requirements. And the implications of imposing that on all video ads. It said opposing stand by your ad requirements would force political advertisers out of short form advertising. I suppose one response could be that the candidates and speakers would need more money to purchase online ads with longer or larger formats. They can comply with disclaimer requirements on the face of the ad. Obviously there are practical concerns that we would be forcing those with fewer resources to have to spend more which would limit how much they could speak. Let me ask you, Mr. Shapiro, would that raise constitutional problems for disclaimer rules to result in short video formats or character limited text ads? Perhaps small banner ads to be unavailable as speech vehicles especially for those who don't have the resources to use more expensive ad formats? 

I think so. I think of a regulation causes a certain kind of political communication to be impractical or too expensive or otherwise unfeasible it's a problem. I think just like technology adapts I think the onus is on the regulatory commission to figure out a way to apply the regulatory regime or have an alternative way of getting at who funds the ad in whatever way that might be possible. Whether that is having a rule that Weber publishes some kind of ad has to be - -you can find it on the FEC's website . I think the default should be do whatever you can, not to take millions of communications off the table whether it's due to a legal or practical barrier pick 

On the issue of stand by your ad, the requirements and the application in the online context, Mr. Dickerson you wrote at some length in your comments on that issue. You touched upon it briefly on one of your responses. Could you spell out with a little more detail why you think that is problematic from a statutory perspective? 

I would be happy to. I am looking here at this regulation which I'm sure you all have in front of you. It is multiple parts. This has been changed over the years. We give that background for the intellectually curious in our comments. Essentially, the underlying baseline is that a speaker has to identify the organization or entity or person or community that makes the ad. There is an explanation of what needs to be included. I am looking here at subsection A sub three which talks about independent speech. It says that if an ad is not authorized by candidate or political committee it should include the permanent address. That is required for anything. It's required for broadcast ads or public medications with the commission consistently slotted this into. The problem is the stand by your ads come into the broadcast space as a result of amendments to the [Indiscernible]. There you have that those are requirements from television and radio. There is a long statutory argument in written comments. There you have this issue of those who apply to broadcast stations putting out radio and television. Broadcast stations are not general communications within the meaning of subsection A. It's been the understanding of the commission that in the Internet, it's a general communication under subsection I. The commission would have to break with quite a long period of consistent statutory interpretation in order to suggest that television and radio are covered onto the communication portions of that act. I think that's a tough road. I think it's made especially difficult by the fact that Citizens United specifically said you are right. The reason you have an under breath challenge is that the stand by your ad provisions only apply to broadcast and specifically do not apply to the Internet. I think we could weigh into this and there's a significant problem with the importation of the radio and television requirements online. 

Mr. Ryan and Mr. Fischer underneath supported the inclusion or the importation of stand by your ad requirements to online video committee case. I want to give you a chance to respond to that. >> I too have 52 USC open in front of me. 

It looks like we are all in agreement about that. 

I don't. 

We can get you a copy if you want pick 

My view is that [Indiscernible] amended as Allen explained does not mandate the extension of stand by your ad to online video and audio. Nor does it foreclose it. I think the commission would be well within its authority under this regulation to include or require stand by your ad disclaimers in online video and audio communications and the way this would play out, Allen knows well is the commission adopts the regulation, Alternative A, Allen and the Institute perhaps sues the commission and argues in the context of that litigation under the administrative procedures act the prying Chevron steps one and two. This new regulation is arbitrary, capricious, abusive discretion, contrary to law. I would be happy to litigate and argue the case in defense of April. I think Allen and I will not agree on that. He thinks it's beyond the commission's authority I think it's within the authority of subpart A but that is how this would go. It is certainly not required by the statute nor is it foreclose. 

The stand by your ad is under subsection D titled additional requirements. What ever is contemplated in A, D is in addition to that. We have received in addition to Mr. Dickerson we've received a lot of comments raising the same concern. May be this -- maybe throughout this rulemaking without getting too bogged down we can reach a place where we can provide the necessary information for voters to make informed choices and to understand who pays for ads while the same time accommodate the speech that is delivered on the Internet. Mr. Fischer you mentioned Facebook ads currently --you would mention the examples because they require a full disclaimer. I want to clarify what you meant on the face of the ad . Some of the ads I've looked at there may be a partial disclaimer or an icon or information tag which pops up with additional information. I wanted to clarify what you meant about the face of the ad. 

Sure. I'm going to use this as an example. Under Facebook's new rules, assuming this is the image that you upload onto the Facebook ad itself -- 

Are you talking about example one on the handout? 

Yes. It would be above the image that it says sponsored and paid for by Senate majority PAC . It's something that is built into the frame surrounding the ad as opposed to the image or the text that the advertiser is seeking to include within the ad itself. 

Is that with every add? I am looking at an ad right here that is for a local race. It has a video attached and there is an information icon which you can click and find and pop up and give you the full name of the committee as well as a link to further information about that candidate. I guess --this is an interesting rulemaking in the sense that --I guess there are ideological components regarding free speech. There are some practical down in the weeds considerations where I think and I hope we can find agreement even across lines that maybe had some disagreements. Mr. Ryan you mentioned on the Internet it is virtue and it's not a static medium print it's interactive and that we need to capitalize on the virtues of the Internet. To me it seems like one of the virtues is the ability to interact and have information readily available within -- whether you are hovering over a screen or clicking and getting a pop up. So that perhaps we need to expand our conception of what on the face of an ad means or expand the conception of what communication is. When you're dealing with newspaper ads and television ads and radio ads, when you talk about having a disclaimer on the face of it, there is nothing else that is involved in that communication on which you can append a disclaimer. The Internet is different. I guess and mailed communication the commission has long said that not every page of that letter if it's a multipage mailing needs to have a disclaimer. And do we need to conceptualize what it means for a disclaimer to be on the face of an ad. It seems like there are mechanisms and we received comments from groups like [Indiscernible] which talked about the digital advertising alliance and I think it's the next panel we may learn more about the voluntary standards. So information can be readily accessible. So the keys as Mr. Dickerson said that are applied in disclaimers can be used to go to campaign websites or to FEC webpages or to databases and information that are supported but do we need to reconceptualize what on the face of the ad means in the online space. I believe that open. >> My interpretation of on the face of the ad means that when the viewer looks at the ad they can immediately know who is paying for it without having to go through --without having to take affirmative steps. And with an indicator that is an affirmative step you have to click on to get the disclaimer information. I think most of the Facebook political ads that I have seen it's within the frame itself that says paid for by XYZ. And that the viewer by looking at the ad without having to take any additional affirmative steps would know how to pay for it. 

I will add I think in a perfect world having the disclaimer on the face of the communication is probably the ideal. As both the chair and vice chair pointed out, I think we all agree there are circumstances where that ideal cannot be met and that there will be some sort of flexibility so we can continue to accommodate shorter ad formats online that are valuable. Valuable to those who are speaking and those who are receiving the message being conveyed. The trick is how do we get from --what's the objective trigger that gets us from the full disclaimer to the adapted disclaimer or the icon . That continues to be in I think throughout the rulemaking it will be one of the main challenges that we have. The way I look at it, in many cases when I look at some examples of putting the full disclaimer , for one thing what may be clear and conspicuous in one format if you are on an iMac with a 25 inch screen that format may be clear but scaled down to a smart phone it may not be so much. If it scaled down to a Apple watch it may be nothing but gibberish. It seems that we will be putting a great burden on online advertisers to guess as to what is it --when will I be required to have a full disclaimer? When can I have something that's more of a truncated disclaimer? And I don't know if there's any easy answers on that. I am hoping we can reach and like we said utilize the tremendous capacities the Internet provides to allow us to have the best of both worlds. When I look at these ads, it seems that we are getting the worst of both worlds. We are getting a cluttered ad which doesn't give you much in the way of speech and frankly doesn't give you much value in terms of what's on the disclaimer itself and maybe I am a little bit to Pollyanna-ish but I want to know where the speech can be clearly conveyed by the speaker and understood by the recipient while the same time having the information right they are available again through some sort of a click on an icon or something readily accessible so the viewer of that ad can have the information to which they are entitled under the statute. That is what I hope we can achieve in this rulemaking. One last question I want to ask. I agree with what you said , Mr. Fischer, earlier that one step should be in one step. I know there are concerns addressed in the past that when you click occasionally when you click on an ad that does not have a disclaimer and go to a landing page, sometimes the hyperlinks may be broken or may be the disclaimer is varied in some obscure place . Should the commission consider that were set a standard for how landing page presentation of a disclaimer should be displayed? >> I don't know that you would want to layer anything with that degree of specificity. There will be so many different ways of complying with the one step requirement. With Twitter for example, the IAD proposal if we click on the I immediately within the application itself or the website you are visiting, you would get the full disclaimer information. You would know if it's paid for by a candidate or have a link to the website. There's also the option of complying with the one step requirement by clicking the link. If you follow the link the information should be presented immediately. I think clarifying within the rule itself , one step requires being presented with the full statutorily required disclaimer information is not more than one click or not more than one step away then the indicator . 

Mr. Walther do you have any questions ? 

I was wondering if I could take a moment to respond ? 

Sure. 

I believe you used the word can't to describe the ads that the commission needs to give some latitude to for inclusion of disclaimers. If in --an ad cannot include disclaimer we need to not eliminate that but have an adapted disclaimer. 

I was quoting from Google and there were other comments that talked about how certain formats would in essence be banned or no longer usable by political speakers by just how much space they take up. 

Understood. One thing we didn't discuss it all, is the universe of advertisers simply don't want to end under Alternative B would choose not to design ads given the latitude of Alternative B to not include disclaimer. And when Prof. Kim gets into this where she talks about malicious actors I think there is a really important distinction that must be recognized between commercial advertisers and a significant subset of political advertisers. Political --commercial advertisers have the goal of impressing upon you the identity and brand recognition. They want to be disclosed and impressed that in your mind. By contrast there are a bunch of spenders in the political sphere particularly non- candidates outside groups that are running negative advertising what mutt nothing more than to remain hitting and not be disclosed and not have the identities disclosed. I mentioned that mainly as a caution against looking solely to commercial advertising standards and practices for guidance on what should be the standards and practices for disclaimers on political advertising. There are different motivations and incentives. One final point that was made by democracy 21 in its comments. This problem or issue or dilemma of small screens is not entirely new. I am old enough to remember my next-door neighbor who used to watch baseball games all summer long on a four inch TV screen. It was black and white. This is the point that democracy 21. Televisions have been available in all size screens as long as they have existed. Screen size shrinking and the commission has never to my knowledge contemplated any sort of exemption from disclaimer requirements because of the fact that a particular ad might appear on a really small screen. Brendan referred to this and I think Allen you get into this in your written comments about the challenges of looking at these examples. How they display will vary dramatically depending on the user and viewer. Not necessarily on the spender or the platform. There haven't been exemptions made in the past solely due to the fact that an ad might appear on a small screen. I don't think we should say we need to exempt ads that might appear on small screen. If I could add to that. I agree it's not a new problem. I think we are looking at different pieces of history. It's true and been uncontroversial and I've hired no pushback that we don't require those on bumper stickers or sky writing or billboards. We don't require this on an enormous litany of standard, well-funded, political expenditures. One is we have a disclosure regime sitting in the back of this that is not really being discussed. We are concentrating on the key part of versus the fast store part of knowledge everyone has access to. I think there is some where's the beef issue in the sense that we have somehow managed to win the Cold War without requiring messages on Billboard. I think worrying about malicious actors is overblown in the context of a rulemaking which is only about a very small subset of online ads that are almost universally going to be used by Americans or universally used in situations where better funded more sophisticated ads are not available. If there is substantial spending on these ads and for some reason disclaimers are not available that will get picked up in the disclosure side of the commission's jurisdiction. I think there's a danger about overstating the issue in front of the commission and where this will all come out. 

Thank you. Commissioner Walther. 

Just a couple question. As I mentioned earlier, I am always a little puzzled about how we can try to see two things. One where the technology will go and second, to be mindful of those who are not interested in complying and how our rules might work great [Indiscernible] and so that is where I think we could use -- I welcome your suggestions that we have people who know how this works. We are talking to our lawyers and we all are lawyers so maybe the gap of information that can help us answer these questions is here. It seems to me that there may be a way to look at this that is the amount of time it takes to digest information. If you click something for a very short period of time, you will grab your pencil or something like that and that - -that it may be gone or it may be a name you never heard before or it's one of those that has a name that has three or four words to it that never makes it into your mind before it's gone. I want to make sure that if we are looking at this should be look and say if you will have like one example here if you have 40 percent or 60 percent that only takes up that time. Not so much [Indiscernible] and we have three or four seconds . Should we look at something like that to help us look at whether it's too small if we look at it's big enough and we need to have say four or five seconds whether a sociologist would tell you you need this maybe we can look at other approaches. >> We have an ad and it doesn't carry the whole message the whole time. But maybe it would be objectionable if it was the whole lad in a shorter period of time. 

It has the virtue of clarity in the sense that --I think the real danger lying in the background of this is how do we define the numerator and denominator of the burden being opposed by the government ? I appreciate the idea of trying to lower the burden in that way. The worry I have is how you go about drafting the rule . I'm sympathetic to the problem of loopholes in this space. For a lot of reason. Partially the way investigations play out. I think the way the commission has to write this is to include two steps. The first has to be some understanding of what the ad is. And I think the suggestion, Commissioner Walter, in the context of a visit --video ad makes that. The difficulty is if you have a rule that says something like that, you know have to define video. You have to define the underlying ad. Your list of definitions will get long quickly. One of the virtues of the second option is to say we will take a percentile of the overall ad however defined, and we will say it's the cut off. I think if you had a rule that suggested four percent or 10 percent and 40 percent, if you did have some sort of clear number like that, allowing the community the flexibility to do what you suggest, sir, in the suggestion of a 10 percent number but if it's 10 percent you do it on a temporal versus font basis and you're good to go. That has a lot of advantage from the point of view of providing a clear line. That's my second point which is not just finding the percentage but for all the reasons that came out in this process it's important to have that sort of objective line. You also have to have an agreement on what the face of the ad is. The face of the ad is a metaphor. There is no face of an ad of this sort. So in that sense, I think the right approach and one that could be in your example could fit would be to say the denominator is whatever product you purchase. It may be a video thing or audio or text or whatever. It might be a brain implant. We don't know. The whole point is not to get the gang back together in 30 years but say once you have defined that -- 

That'll be on your birthday next time. 

As long as we understand that this is the denominator and you can play with that numerator however you wish without the commission second- guessing you or forcing you into an advisory opinion . 

I'm not sure the denominator is as clear as you make it seem. I'm worried even the 10 percent rule are the four percent rule would still give rise to confusion and still require the same number of advisory opinion requests before the commission has a more simple rule like if the advertisement cannot accommodate a disclaimer, then and only then can you use an adapted disclaimer or indicator. I'm just thinking of Facebook ads. A Facebook ad has some text at the top within the frame of the ad and some text that is in the ad itself and then the vast majority of the ad is either video or an image. How is that percentage calculated? Is the percentage calculated based on the available characters in the ad that surround the image? Is that percentage calculated based on the overall size of the ad itself including the frame? Not including the frame? Is a calculated based on pixels? Are you considering the pixels within the image or the video itself or only considering the pixels within the character limit? There are a number of other dynamic types of digital advertising that are likely to emerge in the coming years that will still make this complicated. Regardless --if you go this route , if you go the route of an objective standard you are likely to be faced with difficult challenges and advisory opinion request. Just on the advisory point, I think it may be worth the commission considering whichever route you go with the rest of the rule, having an expedited process for requesters who are inquiring about the application of the rules under new technology or the desire to add of course there is the statutory requirement that a candidate seeking an advisory opinion request can get a --is entitled to an opinion within 20 days. The commission may consider something like that for the rules. 

I guess it would be that is not clear to me in a sense it matters. If you have a 10 percent rule, whether the advertiser decides to calculate that by pixels or time, or by font size or whatever, if you are hitting that , the information is still getting to the potential voter. I would encourage the commission to be flexible in allowing voters to make those determinations. I'm having difficulty imagining the hypothetical or someone meets an objective standard and somehow the information the statute requires is not getting to the voter. 

To have any more questions? 

I know we are getting to the end. One of the differences between alternative A and Alternative B is Alternative B has an exception. I would like to ask anyone on the panel whether you think that is statutorily authorized to put an exception into a rule and if so where does the authorization come from? >> It comes from the administrative procedure act which allows for agencies to exercise the discretion into minimus situations such as this just as it has for decades in the context of the small item and impracticality exceptions. 

I'm not sure one point the amount of political contributions would fall under do minimus exception. The one in Alternative B which says that if it can't comply - -if it's more than 10 percent of the ad space then you go down to an adapted disclaimer and then go back to a further one or just the icon and if you can't do any of that you get an exception. 

My view and the view of common cause would be that would be arbitrary and capricious and abuse of discretion . >> So the whole regime has to fall? 

Interesting. 

I think as we noted in our comments, then the NPRM asks whether any types of advertising exist that would fall under this exception . If there are forms of digital advertising that literally cannot accommodate a link to a landing page or cannot accommodate a disclaimer. Creating an exception for technology that we don't have any information that exists would be arbitrary and capricious. If the technology does not exist now, you can be sure that it will exist tomorrow if this exception is created. >> The one bit of technical stuff that my associate gave me was in the statute for the exceptions the FEC previously recognized. And that's all pins and buttons and Scott writing as well as checks and receipts and other items of minimal value. Either there is authority for those exceptions along the lines that Alan stated, in the Internet realm and otherwise or as I said, there has to be or there is massive First Amendment violations and you have bigger problems. 

Maybe there was never statutory authorization . 

Could be. Could be. In which case as I said, I will have to file an amicus brief supporting Allen's brief. >> Wow. I think that's a good place to end. I like that. 

Thank you all. That concludes the first panel for today. Very helpful comments from all four of you pick a very good back and forth among commissioners. I think a clear indication that we are struggling with the same questions. And people have various answers. I think for me it's we are still left with the same question we started with which is what would the standard be? We had a variety of different options for people today. We put two different ones out with all -- Alternative A and Alternative B. I don't think we have gotten much further yet at least on this panel. I know we have the rest of today and tomorrow. 

Keep hope alive. 

Yes. Some suggestion was made and I was alluding to this earlier to the extent that we are not able to come up with a practical , administrable, objective standard and the notion we want people to come back to the FEC every time they want to run an Internet ad does not work for me at all. That is really the goal of this to come up with a rule to prevent that exact situation from happening and as Mr. Dickerson said our track record on those opinions is not good at all. We were not able to agree on a number of those. With all of that in mind, we may be forced and it would be defensible under the administrative procedures act to say that while it might be ideal to have as much information on the face of the ad as possible, because of the nature of the ads and because may be potentially we cannot come up with an administrator both standard the indicator may solve those issues once and for all by saying we have a place here where we can go and lead you to a bevy of information that is greater than what was presented on the face of the ad and arguably what's presented on that ad probably does not do a lot of good with respect to providing information on who is placing the ad. In any case, thank you for coming this morning. We greatly appreciate it. Happy birthday to Mr. Shapiro. >> An administrative matter and a quick rebuttal which is that right now the law says that all public communications including paid advertising on the Internet require a clear and conspicuous disclaimer. That's what the law is now. If we don't do anything else that's we have. 

That is what it says however there are exceptions we talked about and advisory opinions on point. 

So lunch everyone. There is lunch available in the conference room which is out the doors and to the right. It is raining out there. The security takes a while. I invite you to partake of the finest lunch that Cosco afforded . I'm sorry I didn't mean to make a commercial but it happens to be where I do my shopping. 

Was the disclaimer on that? 

I will make one and that is that the handout at the back of the room was prepared by the chair's office. It is based off of examples we agree to but it includes some compare and contrast commentary. 

No. The handout in the room -- 

That's not in the back of the room. 

Okay. Find then. 

Someone handed me something that's not in the back of the room. Anyway lunch next door. We will see you back at 1:00. Thank you. >> [ Panel is on lunch break. The event will resume at 1:00 ET] >> [ Event Concluded ] 




Good afternoon, the public hearing is back in session. Welcome to panel number two. We have Mr. Dave Grimaldi from the interactive advertising Bureau he is a vice president for public policy. We have Mr. Joseph Jerome the policy counsel for the center of democracy and technology. We have professor Joseph Jerome . We have Mr. Berin Sz—ka , president of TechFreedom. Welcome to all. We look forward to panel number two. We figured out Dave, and I were interns together on a presidential political campaign about 20 years ago. We remember one another from that long ago. Is it anybody's birthday? We had a birthday boy on the first panel. No birthdays. we will start out with five minutes of opening remarks from each witness. We have lights in front of you. The yellow light will come on when you have one minute and read when it's time to wrap up your comments. --Red when it's time to wrap up your comments. 

Thank you, for having me here today. I am here on behalf of the interactive advertising Bureau. We are the Association of digital media and marketing industries. Its companies are committed to a transparent web-based advertising ecosystem. Rules that foster informed electorate without chilling political speech. We believe that the DAA political ads program should be an important part of the digital rulemaking. Most people think of self- regulation as something dead and set of government regulation. --Instead of government regulation. We see the political program as a standard to assist the FEC with creating flexible, sustainable, and useful transparencies in the digital world. Last month we launched an initiative to increase transparency and accountability around digital lyrical acts. The program builds -- political ax. The program builds based around clearly showing people when an ad is paid it's a paid political ad. Helping identify commercial ads has been translated to help those learn more about who is paying for political ax. The political ads are responsible for providing that link into information about who placed the ad and her spending and contributions. By including the ad icon as a recognized signifier in this rulemaking the FEC can provide one method to enhance online transparency. The benefits of the icon are clear. It is employed in a clear recognizable fashion. The enhanced notice associated with the political Ad will include any disclaimer required by state or federal law and as recognized by the FTC. Translating well-known icons helping people identify commercial ads to political ads includes placing those under accountability programs which include independent monitoring , self reporting, and enforcement. By including the DAA program within its regulatory framework the FEC can have private sector health --help in making sure the icon is used. Recognizing the ads icon as a recognized signifier like the political ads icon as a way of satisfying the FEC's disclaimer requirements allowing for simple objective criteria to determine whether the requirements have been met and provide a symbol that will become well known to users across the country and platforms. Education around the signifier is essential. The icon helps people identify commercial ads and it is already well known. Studies shown a significant increase awareness of DAA's icon helping people identify commercial ads and the purpose it serves to inform consumers. Awareness of the out choices icon has risen from 5% consumer awareness in 2011, 2013, 2/60% this past year. This plays a strong foundation of awareness for our new political ad icon. Companies spanning Internet advertising ecosystem have invested significant resources in deploying the transparency infrastructure. These companies are the same ones that help facilitate creation and display political ads online. In the coming months these companies will be able to seamlessly extend existing DAA infrastructure and platforms to disclaimers. This way the I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all. for program creates a unique strong foundation upon which to build and display disclaimers to small political ads. DAA icon helping by drawing praise from regulators and administrative people. In addition FTC staff said in 2017, that the DAA has taken steps to keep us up to speed with the evolving technologies and provide important guidance to its members and the public. Its work has improved the level of consumer protection in the marketplace. At a time when the commission is considered clarifying its roles and strengthening more information to the public. Supporting a base system is the most technologically resilient approach. Rules focused on characters, pixels, seconds, font size, contrast, and other visual factors are too inflexible to withstand technological change. Consider the different readability of disclaimers on various devices. A rule driven by pixel count or other static metrics may provide a clear disclaimer on a tablet but not on a phone or smart watch. A signifier based rule avoids these concerns and provides a readily echoed --recognizably type of icon. Thank you, for the opportunity to speak to you today about the political act program and the reasons to include DAA political ads as a recognized signifier as a way to provide enhanced online transparency. I look forward to your questions. 

Thank you. thank you, for the opportunity to testify today on behalf of the Center for democracy and technology. It is a nonpartisan nonprofit technology advocacy organization dedicated to promoting civil liberties and human rights online. It includes privacy, free speech, and access to information. We recognize campaign-finance rules can in some respects but these value in intention with each other. They strongly believe the Internet provides new outlets for political expression . The elephant in the room today is the mechanics of online advertising coming notorious and opaque while transparency rules with respect to clinical advertising have not evolved. New lead efforts may solve this problem. It has the potential to make situations worse if the FEC does not engage in meaningful oversight. We are concerned that the myriad of different initiatives complicate things. Speaking on privacy and consumer protection effective disclosure requires standardization and education. What can FEC do? Any industry led advertising program will need to be vetted by the FEC as well as independent researchers and designers. The political ad program aims for transparency and accountability. We hope that this is the case but this shows there is need to be skeptical. Some might article --argue that the ad choice program has been far from a messaging success. The most recent survey that I have seen suggests that awareness of the choices icon has risen to 42% of respondents to that survey. Awareness is not the same thing as understanding. As someone who frequently speaks to consumer advocacy organizations, tech oriented students, I can say that few people I speak with understand what added choices is a recognized the ad choice power triangle. Meaningful short form notices cannot be created by committee, layers --or lawyers. They need to be created by experts. The FEC should be clear about what its expectations are. Safety symbols for example must be correctly understood by 85% of participants. In a narrow context of political advertising we would have to see indicators or disclaimers that are created by experts , empirically tested, and results informed and reported back to the FEC. Past experience suggests that with the example of the added choice icon that there is some problems in this respect. I think it's an open question how self-regulation of political advertising will be enforced. FEC must keep itself up to speed on different platforms being policed and political content. With respect to added choices it's unclear how rigorous enforcement action really is. The existing programs and force --enforce consumer advertising. On one hand the essential component of this program is simply transparency and not more substantive contentious data privacy protections. The interests of the industry and the public may align in a way that does not exist for purely data-driven advertising. Ultimately difficult questions will have to be asked as to who determines and labels online communication as a political ad. We have seen tremendous problems with Facebook's attempts to place rules around issue ads. They are not an issue here but they cast a pale on everything involved in political expression. Making candidates and campaigns responsible may be the best option. It creates accountability problems throughout the system. At the same time disclosure frameworks may be subject to scope creep. It is a pressure to label more types of communications as political ads and there might be incentives for advertisers to error on the side of more disclosure not less. This calls for a broad-based education campaign. More must be done to understand how micro-targeted political messages work. Outside of the scope of this rulemaking effort but it cannot be ignored. The FEC certainly with alternative meet seems to recognize Internet advertising is different from traditional advertising and that disclosure requirements should be adjusted accordingly. One of those differences is that the nature of how digital ads can be targeted, raise new interest that are new to the FEC, and frankly we have been reluctant and to deal with inside and outside of the advertising industry. There are many scenarios online were combination of the idea of the political advertiser, content of the advertiser, and the group being targeted may make us uncomfortable. This is the lesson of the past election. There are experts on the subject in today's hearing. This is an issue who has challenged us to our core. Facebook has begun to provide more information about how it's ads arrive in our newsfeed. It's not available in most online advertisements. That disclosure may be much more informant to the public then who paid for the ad. Thank you, for the opportunity to participate today. I look forward to your questions. >> thank you, for the opportunity to testify at the hearing. I am Young Mie Kim . I am an affiliate of the Department of political science. I am a social scientist who studies digital political advertising. My research project is digital ad tracting and analysis. We investigate the sponsors content and target of digital political ads across multi- platforms with the user based time tracking tool. The tool works like an ad blocker. Instead of blocking ads it captures information. Out of this project the most developed research outcome to this hearing is my teams recent paper. It targets campaigns on Facebook. It is a article forthcoming . The research examined 5 million paid ads exposed to nearly 10,000 consent of participants who represented the U.S. voting population. The data was collected six weeks prior to the election from September 28 to November 28, 2016. The copy of the manuscript is submitted to the commission. As an opening statement I will summarize my view on online disclaimers and then briefly comment on the proposal letter a and B. I believe all disclaimers online rules much --must be guided on principles. They must help individual people make an informed decision without overburdening them on elections. Online disclaimers must help civil societies adjust adequate monitoring. Firmly grounded on this guiding principle I asked the commission to recognize the challenges that we face in the 21st central digital media environment. --Century digital media environment. There is a constant flood of information on this platform. My research indicates that individual reporters received an average of 50 Facebook ads during the six weeks prior to the election. In case of digital advertising therefore orders are overburdened not speakers. Demanding voters to investigate who is behind the political ads beyond the face ad. It's not only on --unrealistic but against the principal. Unlike broadcast media by nature digital ads are not publicly accessible as they are designed to appear to target individuals only. This means currently it is almost impossible for civil society to monitor these ads. This suggests rulemaking with considering how online disclaimers help monitor digital ads. Online disclaimers for example must provide the consistent rules not on only platforms but on all mechanisms. Malicious actors deliberately taking advantage of the disclaimer requirement. My research showed that many campaigns in the elections were run by anonymous groups who did not report to file to the FEC including suspicious groups who have no public footprint. One out of six suspicious groups later turned out to be Russian groups. This research showed a link to a group landing page being required. Only 45% of the groups revealed their identity on the face of the ads. Taking into consideration these challenges I found a two-tier approach to be problematic. I propose two amendments to you. The report to require adaptive names with the full names in case adapted names are used in the ad. The placement of online disclaimers in the text as the title or tagline such as video ads are utilized. In conclusion digital disclaimers are long overdue and I urge the commission to take immediate action to make it a clear disclaimer rule. Thank you. thank you, for having me. Congratulations on pronouncing my name correctly. That almost never happens. I am Berin Sz—ka . We are dedicated to promoting technology that improves the human condition. In general our focus is on empowering users to make choices for themselves and in doing so protecting free speech and other constitutional values. I will make two disclaimers upfront. I am not an elections law expert. I come to this hearing with no conceptions about your commission or who you are or where you're coming from. I am here just to talk as a generalist about free speech and my experience with these similar issues in context of online privacy where many of the same questions about transparency and user trays have been asked. I am not a technologist. Take what I say with a grain of salt. I am trying to point you in the right direction and suggest ways for you to draw technical expertise into your decision- making rather than making firm recommendations myself about specifics. In general our focus is first and foremost to free speech. It unites all of our work and it is a framework for which we look at Internet policy generally. It is really a framework about user trays and letting ideas flourish in marketplace. I am concerned when people say there are too many ads for example. To me that is people saying there is too much free speech. At the same time the professor is right there is a burden upon this. Transparency and choice is the way to address that. The question we deal with in much of our work and especially in privacy is how to balance those competing interests. I think the way to do that is to focus on usability which ultimately is a question for technical experts rather than Laurier's --lawyers like myself. I see these questions break down into two broad categories. The first question is what is the nature of the ad? Much of the criticism that has been directed towards the added choice system. I think it is not applicable here. For the simple reason that many political ads are political ads on their face. Not all of them. In many cases it will be apparent that that is the case and certainly far more so relatively speaking then it is apparent that a behaviorally target ad is a behaviorally target ad. That's what we're attempting to deal with with the icon. There is no shorthand for communicating the idea for users. I think the choices term is best to signify . There are many others and there are technologies that tell you there might be in a better implementation. I do not think there is any better signifier than the term political ad. That does all of the work you expected to do on the face of the ad. I think that is an adequate answer to the first question. I would caution you that trying to extend that signifier to include other things or to make a more complicated will compromise usability in terms of making that signifier last consistent. Joe, is right we have to ask how often people understand what they're looking at. How do you label political ads. It's critical for usability. who is behind this ad? I think the only way to do that in context is very small ads is providing it in a separate page. How do you make sure the user knows they can get there. Many questions have been asked about the ad choice icon. The people understand what they're getting when they click on that text? I think those questions are somewhat less applicable here. I think it is a little more clear that if you want more information about that you want to go there. It's not a behaviorally target ad lead --ad. I will point you to my testimony but say that there is no single right answer is much as usability is important. It's important for usability to suggest having one system that works for banner ads. There will be other kinds of ads. They have more room to experiment. It would be unreasonable to expect those same things to be done for all banner ads. I will conclude by noting my general recommendation is outlined by my testimony to allow room for experimentation. The best way to do that is to allow time in the field for the system to be tried. The commission has a role to play and it could be played by demanding technical analysis of how that is practiced. Real experience with an election or two. Encourage awareness building on the industry. I offer what may be a novel suggestion but it's very familiar for people in privacy context. I don't think any disclosure is required that should not also be made in a machine-readable format if it's possible to do so. The text required by your statue would appear in the disclosure page and also communicated along with the ad in a tool that could be invisible to the ordinary user but parsed by any user browser or browser extension. This will open the door to all sorts of experimentation that will provide you a better check to see how this is working in the real world. It will allow researchers to do it in a more easy way. It will empower users to make their own decisions. Thank you, for inviting me here to testify. thank you , to all of you. That was helpful. Any questions? I have a question or two for professor Kim . On page 3 you say the gist of your research was figuring out how many advertisements --the people that were selected. 17,000 people per day. It says that they were exposed to 34 impressions per day in approximately seven ads during the window. I think you said something else in your oral testimony. 

That is for the entire year. From February 2015 . 

What is the entire year? 

34 ads per individual on average. That impression is for the data collected throughout the entire year. The paper we are publishing is just focusing on Facebook. That is 5 million ads exposed to nearly 10,000 people. That's an average of 50 impressions a day. >> That is a completely different testament. The one that's in the comment talks about 34 impressions for the entire year and a fraction of the percentage of that seven political ads per day. The paper that is coming out talks about 50 impressions per day per individual on Facebook how did you select the number of people part of this study? 

We got help from a fund. A typical sampling strategy. We try to sample meters and population. 

If you would be willing to provide background information on the sampling you did. He met that is included in the paper. --That is included in the paper. It is available online and updated to the commission as an attachment. 

From your conclusion was that because people saw 34 impressions per day and seven political ads per day during the FEC window that you say this suggests the demanding voters to investigate political ad is not only unrealistic but also against normative guiding principles for online display. Because there is a lot of them we should not expect them to look further, is that what you're saying? 

We probably set too high expectations. >> Did you do any research about how many people who are receiving all of these ads that you talk about our reading the disclaimer on the base of the act? 

The short answer is no, because we did not find any candidates following a full disclaimer rule in the 2016 , campaigns. We found only a few candidates had a full disclaimer with the full name on their Facebook ad out of 1038. 

That was my next question. Out of 1038 candidates how many ads did you analyze? 

Three campaigns and only three campaigns used. Paid for by . The information is also included in the paper. 

The other campaigns did not use the full disclaimer on their Internet apps? 

Correct. 

Can you give meaning an example of an ad that did not use the full disclaimer on the Internet ad? 

There is no information, paid for by, they did not use a whole name registered . 

Did it express advocacy? 

8% expressed adequacy. >> 80% of the 1038 included advocacy? 

Yes. 

Is out laid out ? 

Can you give us an example? 

Express advocacy is a magic word. We used this like a magic word to match what their added content -- add content -- . >> Does a have a link? 

That complies with an advisory opinion request. 

That is not --I have not reviewed all of the ads. As long as it was impracticable to include the full disclaimer and a link to a landing page is permissible under our current advisory opinion guidance. 

I would like to respond to that. Not many digital campaigns use a full disclaimer even on the landing page. We found a lot of groups use a project name. This is run by American number one packed. They used a full disclaimer on the video and then a link to the video. Not clearly indicating that. Tramp traders, would be a better example. They used a project name, but never indicated who it was run by. Republicans , for Clinton, 2016, you had to find that information and go to their website. Some of the ads link to external websites and some did not. 

Thank you, will take a further look at that. With respect to what I was talking about earlier. The number in your conclusion is because they are viewing a lot of ads. It's requiring them to go further and it overly burdensome. It's not realistic. How do we know if we were required information on the face of the at that they're going to read it? That is also not going to be unrealistic and flood them ? 

One scientific way to look at that is what is the landing page information is required ? Some cases have a Facebook right column ad requiring information. It did not require full disclaimer because there was no disclaimer requirements in the 2016, election. We found 45% of the campaigns indicated their names in the Facebook added. --Ad. Commercial ads never missed their identity or printed name in the ad. Political ads utilize the landing page information and then that means for 55% of the cases users have to investigate groups behind the ad. They have to click through multiple pages. Research shows that if you have a hyperlink you can use an article on a page. There is a one click rule. People usually click only one thing when you read a page. >> Those numbers you gave are different than the ones we were just talking about. You said three out of 1038. 

45% includes all political ad sponsors. 45% of all political ad sponsors identified their group names and campaign names on the Facebook ad. 55% did not. what research tells us people will stop and pay attention and read the disclaimers that we have in our examples. 

My research did not utilize a tracking message to see where they are at the first place. I think that's an enveloping question. Unlike broadcast media ads people look at the face of the ad. People are exposed to ads that you can skip or turn off the TV. 

Any other questions for the panel? >> Thank you, I wanted to ask a little bit more about the political ads icon program that the DAA is beginning to establish. How widespread is the commercial icon in place? >> DAA is numbers that are impressive. There are 70 million unique visitors today. It has served over 1 trillion times per month. It's in the upper corner of online ads. If you have a moment to click through and look at your added choices and what the icon enables the consumer to do I would encourage you to do it. It has in under 10 years become widespread and well-known. It rivals a lot of other brand campaigns launched by the U.S. government. If you take the recycle logo that had millions of dollars behind it. >> DAA has the ability of that kind of growth. It is flexible and it can go across formats. Our research shows there were 60% awareness of the icon. Over 50% of those asked nowhere takes them and what it does. We are building that. The political ads icon we feel would leverage existing tools from that awareness. It can improve transparency and infrastructure. Turn the icon from blue to purple. we can flip the switch to provide transparency that the commission is looking for , for how online ads are funded and where they come from. 

This would be present on ads across formats? Google, Twitter, Facebook, and whatever platform you want to mention would be an icon that would be present across all of those? 

The icon is live. We are convening across groups to look at how that would be presented across different formats. As with the five times evolved DAA icon and through multi- stakeholder working groups -- you canna --can appreciate how hard it is to work on these kind of things. We can push through with the aim of providing consumer transparency and choice. This is an iteration of that to provide transparency behind political ad ending eared who paid for it -- funding . Who paid for it and things like that. 

There was a lot of questions that dealt with short form ads or small ads that where it was not realistic that a full disclaimer be included. One of the issues we are grappling with is what should be the trigger for win and add should be able to use indicators or truncated disclaimers. That issue gives rise to another issue which is to what extent are frequent online users familiar with these sorts of icons or indicators and are savvy to the fact when you see one of those you can click on and get the information that you need. >> How comfortable are users with clicking and understanding the resources to get additional information? Is that is something they expect out of their online experience it could be one way to help us resolve the issue of ensuring that the disclaimer requirements of the act are permanently implemented at the same time the very short form advertising is also available to candidate. >> Icons are trusted. They are always present. Icons are the new norm. They provide a portal which is really one click away. It gives further information and data in terms of what they are looking for or something that could take them to a related piece of awareness. Our research showed that people do use them. Do people click it if they see it? In terms of smaller ad formats we can do the icon with the sign next to it saying click here for more information. At some point you do have to take the leap of faith that people will investigate and they will go through it. The facts are we have had 70 million unique users and visitors. It is ambiguous. People migrate that way. We have done education campaigns. We have large meetings every year. We had a summit last month to push this awareness out. Help from this commission would be tremendous in increasing the awareness further than where it is today. 

We change the data behind the icon which would be a different color to take people to the information that the commission is hoping they have. We would love to partner in that regard and to just learn from you about your findings and the ones we have not read. 

As I read your comments and opening statement , correct me if I'm wrong on my impression you don't seem overly cited about the proposals that are here and you seemed to almost advocate a go slow gather information before jumping into the crafting of a rule that may not be fully informed by all the facts. In terms of how users interact with online ads and how they interact with indicators and so forth. As we have mentioned we hope to be able to craft a role we want to have something that can meet the demands of the statute. Allowing for proliferating varieties of ad formats to continue to be available to candidates. Let me just ask you some of your observations about how online users can interact with icon , indicators , truncated disclaimers, and so forth. >> I wanted to say we are often times on opposite sides of the table. We are in agreement here we are generalist and layers. People that need to be part of this conversation are UX experts and other types of people who create and design these icons. 

I will have to apologize not being a techie myself when you refer to a UX ? 

User interface and design. Not to conflict with my colleague over here but I would push back on the notion that people recognize this icon we are discussing and it's as simple as flipping a switch from blue to purple will convey anything to anyone. I was considering just coming here and holding up the icon. I wonder if all four of you have seen this icon. >> It's not --I think if the commission was to piggyback off the icon there is some merit here. If we had our way we would go back to the drawing board and create a new icon for online advertising and political advertising. If that's not going to be the case at minimum I think the public and certainly the FEC needs to be involved in the conversations that are involved at the DA. I would just point out that users do not understand this icon. There is a qualitative study that I can follow up with that was done earlier this year. We interviewed people about how they understand and see this icon on different environments. Today people think this is an arbitrary symbol. It is tiny and key to I would point out that another thing missing from this conversation is how any sort of icon intersects with web content accessibility guidelines. That study found that the contrast ratio for the add choices icon was 1.6521. It failed the guideline ratio for small and large text. That is all a long way of saying I don't people recognize this icon. With more public education we can turn that around. At present simply slapping a purple triangle all over the place is going to do nothing. 

Taking into higher-level generality to what extent do you have information or have done research on how online users interact with ads in general? Do they have an expectation about knowing how to click and get more information about the ad and if you see an icon that some method --maybe they don't specifically recognize it. I have seen the icon and have clicked on it before. I am trying to understand what we should expect online users to be familiar with and have some sort of savvy about when they are interacting with an online ad? 

That is a good question. It's unfortunate that some platforms are not here today. I think they have done a better job of implementing these types of icons. Facebook's most recent revision of ads have a floating circle with an eye on it. --I on it. You can click on it and because of the complexity of the advertising putting this throughout a complicated ecosystem will be in disagreement. I can certainly say there is evidence out there suggest people do not know what they're getting when they click on that icon. The way that the icon hides in the ad and the study I was pointing to highlighted this. It's not prominent enough for people to know what to make of it. It seems like a thing that hangs out in the corner. Sort of like a TM slogan. >> 

I am delighted to be here. I don't always agree on things but we are in the same ballpark. We can be helpful in trying to give a conceptual map for thinking about this. It is important to divide this problem of relatively small ads into two buckets. One bucket is a banner ad where we are talking about the DA icon. The other bug is Google, Facebook, and Twitter who control the ecosystem. They can design with the entire page looks like. We should expect them to do better and they have done better. If you look again I will use the example of Google search results. There is good implementations of how to label political ads and how to put up a hover that says --why this ad. It's not going to work for all sorts of practical reasons in the same way for a banner advertising. It is a little rectangle that gets planted on any page anywhere across the Internet. The ad network has no control over what the rest of that page looks like. The diversity of the ads themselves is far greater. In Google search results they have purple control over what the text -- perfect control over what the text ads look like. It is very usable. It does not have the same degree of control. That is the first suggestion I would make to you is to think about those problems differently and allow them to experiment on their own in the contents of banner advertising. We need a system that is going to be recognized over time by consumers. 

Sometimes ads will have to take time to stand on their own. This is why I go back to the importance and clarity of what political ad communicates. I am not a usability expert. Political ad is the clearest possible signifier you can ask for that short space. The clarity of that standing alongside the icon will build understanding among users when the icon stands on its own. That's not the end of the story. You could put a hover text. There are many ways to do this. My main concern is not being optimistic that the government is going to be at a good position to make those design decisions. I think it's fair to ask questions now. I would encourage you to let this play out in the real world and then make sure you are in a position next time you hold one of these hearings to ask tough questions and to make sure what's doing now will change incentives. You can push them to a particular solution. If you set goals or benchmarks and make clear what you want to see happen and ask the right questions now you are going to change how the implementation occurs. I think it's going to be done in a better more consistent user friendly way. That serves my first goal of usability. My second goal is about the First Amendment. I am concerned as a lawyer to see in the context of advertising there is an easy mental slip that happens among politicians. Why don't we do that across the board? First of all let me remind everyone in this room that broadcasting is unique among all media in not enjoying the full protection under the First Amendment. That is because of the supreme records --court's decision. They are probably going to revisit this. As it stands it's limited to the broadcast medium effectively owned by the public and scarcity owned by the public and scarcity . None of those apply to the Internet. The Supreme Court has made clear repeatedly that all other media including videos of crushing kittens , are all fully protected however horrible they might be by the First Amendment. We cannot simply say we require a letter X, Y, and Z for broadcasters so therefore we should require the same for the First Amendment for the Internet. We have to ask hard questions about the First Amendment from the ground up. As a practical matter that is a hard question. Were talking about a medium that's not sticking some percentage of the printed text or disclosure are having a voiceover at the end for video. When we are talking about small ads we are talking about an intrusion on speech. I think it rises to the level of being a very serious First Amendment problem. We need to start with the least restrictive means. Implement it effectively and it would be a good way to accomplish the government interest in ensuring people know what kind of ad it is and how to get the disclosure elements required by statute. If you start from the First Amendment framework you will wind up at a place that is usable, and also does not intrude on free expression. 

You were reaching for the microphone earlier. I will step down and let my colleagues answer questions. I just wanted to hear what your response was. 

In response to Joe's, point. Going slow is a good thing. I have spent a lot of years in government and know the virtue of that. The reason we did not go slow on this was because the last election showed exactly what can happen when there is not awareness and when too much is being taken for granted as to how simple every day things can be recognized. We did go slow and we stood up in response to better online advertising for political campaigns. Ads are obviously very different. We as a crushing --crossing group decided to coalesce and figure out what we can do to help improve transparency. The political ads icon allows that with the user not really having to do anything but click. Joe, mentioned they do not know what they're getting and it impedes discoverability. That is the opposite of what it does. If they click on it they do. It impedes discoverability and they will discover who is funding that added. I would push back on that. I think it's a universal concept to think if you don't walk through a door you're not going to know what's on the other side. That is the case here. If you click on it you find out what it does it is not take you down a rabbit hole it takes you to a pop-up that says who is funding it, and their contact information. There will be a link to the FEC website to do further investigation. I would note that. We're not just slapping a purple icon on something interesting it will work. This is years of research from a related icon that has 70 million unique visitors. It has proven to improve online experience. You clicked on it and it said to you, learn more about why I am seeing this ad. That is a good thing. That is discoverability, that is using your own preferences and what you want to see and how you want to be served and add to a degree that did not exist before. We would like to do that for online ads. To push on the ease of the notion it does not require the user to download an extension or to do anything to enable their laptop or anything else to be machine readable. It is just right there in their face. The one thing is users have to click on it to see what's behind it. We would like to partner with you and anyone else to continue the education to do that. >> I acknowledge that self regulatory design element. It does have some positives. However a political ad goes back to the guidelines. Unless FEC provides a consistent guideline we do not have an understanding of a campaign-finance issue . I think --I didn't know FEC cares so much about design issue. It is really good to take into consideration user ability. We need to be cautious about user ability research. I have done some of it in the past and it usually happens in an isolated lab. When users have a lot of time and they are paid to do so they -- it's contextual and it is good to pin down what causes preferences for color or what elements make it more feasible. It's irrelevant to the discussion on disclaimer policies. >> Thank you, to all of the witnesses. This is been different from our first panel. It's a lot less legalistic and that's kind of fun for us. Thank you, for recognizing that there is some urgency to this. The notion of going slow and sitting back and seeing what happens and what develops --I will tell you one thing that's going to happen is more elections are going to happen while we sit around and watch and wait. I don't really feel like we have the luxury of sitting back and waiting and seeing what happens in 2018, 2020. I think we need to move fast. We are not writing on a blank slate for the First Amendment at some point. There is a lawn the books that requires disclaimers that has actually been upheld by the Supreme Court. They recognize that there is some burden on people who have to put a disclaimer on their ads. That is okay. That is not an unconstitutional requirement. I had not seen the little triangle icon until I read your comments. When I looked at it I have to say it did not really speak to me as something I would normally look at and say , oh, I can see I need to click on that to find more information. It kind of looked like a little eye with a circle around it. One question is what do we get by moving to a triangle from a circle? When we played around with the examples we thought we would throw out this is one way of doing it . People know to look for certain things in train stations, and airports. It would be a clear indicator. One question for you is what is the advantage of using a triangle over a circle? 

We would be happy to monopolize on all the confusion of the icons globally. It is a proven trusted signifier. While you may not know precisely what it is if you see any icon that denotes information and clicks on it you will be taken for the, add choices program , to opting out of certain behavior herbal tracking concepts. If you -- tracking concepts . It notes the facts of the numbers of the lesson 10 year history growth of this. There are millions of people who know what it is. We wish the number was billions of people. Hopefully we will get there as we continue to grow this and member companies use it. Political campaigns and political ad agencies use it. It will have the benefit of growing for consumers on both sides. Those viewing a political addict click on it and find out what it is or what it leads to. They will see the purple I and the sideways triangle. When we see the blue and perhaps they will think well it took me two great political information and I will click on this because it is not a political ad and it takes them to opting out there learning more about how their preferences are online. I think that answers your question. Our education and our history shows that this is click through that users use icon and they trust them and we hope they continue to use this one as we enter this raving world of political transparency. 

It sounds like you want to be promoted. That is not really the goal. 

That is not our goal. It is to give users more preferences. I would imagine that if another icon was offered that had a different disclosure mechanism and led to increased voter awareness of who was funding a political ad that would be a terrific thing too. I don't know if it would come with the infrastructure that we have already built in a parallel capacity. It is already up and running. This is already up and running as I said this launched May 22. We have convened all these groups to continue to work on it. It is going to continue to be out there. Hopefully those watching this hearing will hear what we are discussing go check it out as well. This is an industry self regulatory piece of awareness. >> Let me take a step back. In broadbrush this is what I take from this panel. Use an icon , here, use ours. No, use political ads that will be clear and people will know to click on that. Kim, says nobody is going to click on these things anyway so that's not really great you should be really skeptical about anything the industry is offering up any need to keep a sharp eye on it. Have I got that right? What are we as a body supposed to gleam from all of that and how are we supposed to use that information? >> I would like to provide context about political ad of indicators . These tools are designed to protect user privacy. These tools are great for protection of user privacy but added choice --Ad choice has nothing to do with political disclaimers. A political Ad indicator as I mentioned -- no matter what the platform does somebody needs to provide guidelines and define what should be reported, and what should be archived . I think that should be the FEC. 

For example a Facebook tool that similar to added choice that Google has -- Ad choice that Google has originally designed for the protection of privacy. Researchers show that targeted information provides vague information. They got the information and then compared that to their own simulation on what the differences between the information they got from the targeted Facebook and the information they got as a user. They found huge discrepancies. To some extent the problem is that it is still black box and incredibly impossible to know what decides a political ad and who provides information on what basis. I am skeptical about any of this innovative tools . Those tools can't replace online disclaimers. 

I think this country is under attack. I think what you are doing is extremely important. There are people trying to compromise the integrity of our elections. Please, do not misunderstanding I say anything as suggesting you should go slow. I think the commission does need to issue a rule . I think there are aspects of this like the definition of what is a political added that only you can clarify. I don't dispute that at all. I am suggesting that when you do what you do, you should be careful not to be overly split the big about usability issues. I think you can go quickly in issuing a rule. What I lay out in my comments if I were you I would encourage you to have an interim rule, sunset , any number of ways of doing this. I'm not familiar with your procedures or presidents . I would suggest to the extent that you are concerned about these questions about it being recognizable enough and so on, those things and those things only , that you tree in a going forward --treat in a going forward window of suggesting the next two federal elections to collect data on how those things are implemented before you leap to specificity and that aspect of your rule. I want to make sure that that's clear. I think you will learn a lot about the marketplace and the usability questions. You have an opportunity to shape what the industry does in the meantime by asking the very questions you're asking today. Zero in on some of the uncertainties. You have identified confusion on this panel about as to how exactly the political ad system will be implemented. I think that is because what I read as being first drafts of what their protocol looks like. You will know they call for a participating advertising and network to implement an icon word. It is not clear what will apply in what context. My understanding is they will apply a rule that is similar to the rule that applies to the ad choice context for a relatively large ad or essentially for all ads other than where becomes infeasible because of tiny size of ad. The advertiser/ad network is asked to to include the wording. I understand that we are talking about an icon plus the signifier. The signifier is and a political ad. I understand that most implementations of the ad will display both of those things. There will be small ads where it's not feasible to put political ad in the ad itself. You just have to have the icon. In this respect I think it is very important that we have built recognition of the icon in that larger context. We are not starting from nowhere. Far from promoting something that the industry is monetizing. I think it is good that we are building on something that already just because there are some initial consumer understanding. If we have another version of that that has a different color or wording I think we will be starting from a better place in terms of user recognition. That really should be our goal building up from there. You asked a question about the first amendment case law in this area. It's been a while since I've read that but my regulation is that case dealt with traditional forms of advertising. I do not think that those questions are the same here. I think the trade-offs we are talking about are very tiny ads where you could not fit political ad even in. You need something small with an icon. I think those represent different First Amendment problems. You're talking about intruding on significant percentages of the content of the ad and the look of the ad and the ability to design something effective. I would tread with caution and look for the least restrictive means. 

The Supreme Court approved for a second disclaimer on 10 second ads. We are going to have to table that. You and I are not going to resolve that particular debate. >> We are generally in agreement. It seems to be that everyone is in favor of some form of disclosure. Alternative inception is no longer necessary. Internet advertising should be able to facilitate something. We are constantly told that platforms are driven by advertising. I think that is correct you can be a very powerful signifier. This thing that needs to happen is follow-up . I think we all agree this needs to start happening now. I would encourage you to engage with the DAA. I reviewed the application of the self-regulatory principles and their very high level. These principles are currently enforced by the Better Business Bureau and the data and marketing Association. I don't know if anyone has ever sat down and have them start looking for political advertisements. I don't know if they know how to do that. I also don't know how political campaigns are really informed on the ecosystem . I think there is a role for you guys to play in doing that. It is obviously not a perfect solution. I think if we do this now you will get a lot of interesting data in the selection and we will do something in the future. 

Let me follow up on that and ask about the enforcement mechanism. You talked about this briefly and you have it in your testimony. What exactly is the enforcement mechanism? I don't understand the concept. I'm not sure what yours is ? 

We partner with the Better Business Bureau and the DME. --DMA and public. Complaints come in about the icon. Those are taken very seriously and they are investigated. Should --. 

Advertising self-regulatory counsel. Data and marketing Association. They are our watchdogs. Every year they compile a book with all cases that have come. There are 87 so far. We found that that works. They work with companies to bring them into compliance should they be running a foul of any ad choice principle. The working groups we are using right now in conjunction with those two bodies are looking at how to enforce any violations or any misinformation that would be provided through the political ads icon. If there is a website that a user goes to when they click the icon for a campaign that does not work, that would be investigated and they would go to that campaign or at a market and say to them, we got a complaint from Joe Smith, who went on an ad for your candidate and the icon took them to an address for the campaign that did not exist. We found out we went to the FEC website conflicting with information you have given. That is the watchdog mechanism but we also work with the FEC on enforcement regulations in terms on how we can make that stronger. FTC said the DA icon had teeth. As was mentioned early in my testimony the previous administration praised it. The general said this is a success story. It was used in the privacy proceeding. We have stood up other organizations that root out fraud and malware. We have found --I encourage you to go to the website to see how we pass standards across groups that spoke to what ads were the most annoying. Flashing ones, banners, ones that were automatic, ones that you couldn't stop. We take it seriously because if we don't do it right people block our ads or they just go online less and they don't click through ads. We take this stuff seriously. >> You are talking about commercial entities with an ongoing existence. You are not talking about, for example a pop-up political committee that exist for two months before an election and then suddenly goes out of his distance. --Existence. 

That is what we are currently working on through our work groups to find out to the extent we can work with the FEC and put more teeth on this to rule out fraudulent campaign information and information that's posted for a candidate state or federal that comes under your office and it is incorrect. We would certainly go to the heart of that and work with that group to have it changed her we would flag it for the FEC. 

Is there an icon we can use that's generally recognized ? >> There is information from watches. If you look at the problem we are faced with & Talk about a watch right now. What can we do if somebody wants to say for example under regulations expressed advocacy is [ inaudible ]. It conveys enough of the message to know that that is a favorable message for Mondale . Is still on the books. Somebody says Mondale! Is under watch. If there was a small litter either depress it. Would we have to assume that this will tell you who paid for it? Do you just take a risk that somebody will press the letter I? In theory they get it. How do they get it? Where is the way in which that information is received? I bring that up because it interesting for you to say we don't have a exception anymore. In theory we would have to deal with circumstances like that. 

You went to the heart of it. If there is an icon that leads to further information , the user often times has to click it or hover over it letting that information pop-up. With a watch it gets a little bit trickier. You have to go across formats and devices . That is where the evolution of this will go. 

That is what my children are communicating. I have a 5-year-old granddaughter that goes to school and they have a watch there. They know where she is. It is just like they are talking to each other. It has got to be just like the Internet. That type of personal messaging is going to grow a lot too. I think -- we talk so generically with our language that we pick that kind of thing up. I'm trying to figure out for the future what we would put in our regulation that would cover those things. 

This is exactly the kind of problem that tech freedom deals with overtime. Our general advice is to caution lawmakers against making technology specific rules. We do not want to write a rule today for all technologies that exist. Today you cite the example of a watch, tomorrow it could be an augmented reality on a contact lens. There is many numbers of implementations. My suggestion is focusing on coming up with standards that are functional rather than being technologically specific. If you write a standard that says something like , where it is not feasible to display more information , however you want to word that then you can use an indicator system or the smaller version where you don't have the word in it. The important thing is getting the standard right. 

We have streaming. Even if you couldn't get it on the face of the watch. 

There are two different dimensions of this problem. One is a dimension of visual physical space. That problem is much harder to solve. That is where you're going to have an icon forwarding may not be feasible or small enough. Anything that has a dimension of time even a 10 second video, you can stick a visual word onto that in a much easier fashion. The thing that I'm concerned about is the small rectangular spaces . Contact lens, banner ad, watch , those are examples where you need an icon that will be recognized because you have built up consistency across time. That is where there system could be very usable. You need to have real data that's only going to come from experimentation. Professor Kim, is right. It's easy to be misled into designing something you think will work based on lab data that is contextual. You really need real-time experience and that is going to require industry being allowed to experiment. 

I want to follow up with Professor, Kim, if you could provide additional information. I could be missing it but I went back and looked at your comments again. When you characterize groups as FEC groups --the reason I'm so interested in this is a couple of different panelists in the previous panel cited your work. Two different people who testified earlier today said not all political advertisers are using any kind of information whether a link, or disclaimer on the face of the ad. You also said that today. I want to be clear about what kind of ads you're talking about. I know you characterize in the paper FEC groups. When I looked at the ads included in that they were all issue ads and they were not election or communications. If you would not mind submitting --. >> Image adds in the paper are issued. Those are non-[ inaudible ]. 

What about the FEC group? 

Those are -- . 

There were some political ads that did not include disclaimers or links to disclaimer information. 

That is 45% of the groups identified themselves on the face of ads. That information is based on all sponsors of political ads. Those include all kinds of ads. 

I would love it if you could supply us with information on just with within our jurisdiction. >> Yes. 

I'm not able to follow what you're talking about. 

The way it is not --. 

I like your summary of where people were. One wrinkle to that that I'm taking away his it seems like with the exception of what professional Kim, put to the side for a moment everyone else seems to list some levels of variation of thinking that an indicator is a good idea. There are some debates about which indicator. Putting that aside I Inc. where I'm leaning is not specifically putting an indicator and leaving that up to the advertiser or the platform. The platform could be the one who decides what indicator is appropriate for a variety of reasons that we have discussed today. The notion of having an indicator that says political ad is going to be very difficult because then you get to the question of who decides whether it is political. I don't think any of the platforms want to be in the position of trying to decide whether it is political or not because we know it seems that there is a definition of that being very different from ours. Ours is a narrow advocacy type of thing. We know that Facebook is requiring additional information from even groups that are doing so issue advocacy. 

What you're saying about Facebook is accurate. They are the ones muddying the waters. It seems to me that your definition is a narrow one. I am not sure why anyone would object to something that actually does fall within that definition. It would exclude issue advocacy. I do not see that as a problem with the DAA system. I think the problem may be that others outside of your commission may pressure the CDT --DAA system issued towards ads. It's not your fault or your problem. 

Point taken. I hear what you are saying. That makes sense. It is just a matter of deciding what indicator might work better and this has been incredibly helpful. I am getting a sense that you are all open to the notion of doing that. I think the commissioner was asking this question. Put aside specific indicators and is it true that at least the three of you think an indicator is an appropriate mechanism for the reader to be able to determine that there is more information there? Not arguing over what is indicated itself but that the icon at least shows most people will recognize there is additional information to be found. 

I would say yes. Frankly due to the complexities of how some of these formats work and indicator is probably the best way to go. I would like to echo the narrow categories of advertising that you are focused on we very much believe that [ Indiscernible  low volume ]. 

I am supportive of an indicator system combined -- being very articulate in describing the benefits of smart disclosure known as machine-readable disclosure. I think that that should be combined with a system. It means that it will allow an accommodation of many kinds of user demands. If the user does not want to see each individual had and wants to see a report that says at the end of the month who showed the ads, someone could build an extension that could do that. The machine-readable code would be supplied and the extension could take off how many ads were shown by X, Y, and Z political committees. Display the report at the end of the month. Any implementation could be developed. That to me is user empowerment at its best and it comes at no cost to the advertiser because the advertiser is already required to supply that information by statue or to the ordinator -- ordinary user because they never see and the implement an extension that chooses to do that. If [ inaudible ] decides they want to improve upon the way that DAA is doing their thing they can change the way they parse that code. They could put political ad in big red letters over the ad. I don't think that would be a good option , but they could do that and you know what, that is the free market at work. Let civil society groups make decisions, let entrepreneurs who make extensions make decisions. The commission does not have to make those decisions if the machine-readable code is mandated to be disclosed. Anyone can experiment. 

Thank you, one consideration that I have is if we leave it open to everybody in the industry to pick their own icon then isn't that going to undermine the principles that Mr. Dave Grimaldi was talking about. Everybody will recognize and know what to do with it. If we have a lot of icons I think we could have a problem of people saying, what the heck, does that mean? That is part one of my question. Part two just to get it all out there , is some of the testimony that we get perhaps from one of you because I can't remember where I read this at this point the problem of broken and malicious links. You click on something and the next day that same information is not there anymore so when you go back and try to figure out where that came from, you can't find it anymore. That could be for innocent or inadvertent purposeful reasons or somebody who maliciously -- you click on something and instead it hijacks you to a different website that in fact says you click on a link that says it looks like it's going to be for pro candidate Jones, and instead your hijack to a place that tells you every miserable thing that anybody has ever said about candidate Jones. 

I made the comment about that. We found that malicious actors took advantage of a landing page. For example some of their groups redirected. Technician can't make a code that would redirect. For example the face --it looks like Trump for president but it redirected to a completely different page. A lot of links are broken. Sometimes it goes back with a different website completely. As a researcher we are dealing with a platform where they are cleaning up the pages for a variety of reasons. At this point we monitor our suspicious group . At this point only one third of them are active at this point. That post a challenge -- posed a challenge. I would like to clarify the indicator. It provides a --more information. There must be minimum information which I think should be the group name and who is a sponsor on the face of ads. It could be adopted. --Adapted. If users want to know more about it the motivation is a key fact here. If I name of factor that makes people click through would be interest. If they want to know who they are and get more information, they can do that. The larger issue I have is that the discussion of the proposal I feel the size isn't the real issue here. 

The way the ads are targeted are mostly charged at the base and it clicks. It's not like print media. It's clearly different on New York Times or like a time measure . It's used for broadcast ads. We have to remember the cost is relatively low and measures are not based on size. Size might be an issue if the content of the speech or the options the speakers have -- like other media or other types of ads digital advertising has a lot of links. And indicator would be an example. >> You can collect data. You can report that and have a small community of people that are alerted. The point that was just made cost is not the right measure. We are talking about art. Talk to any designer. We may ridicule its puppet signing these ads is an art. We make them effective by good design. I don't see a way to do it that would be consistent available. It will allow implementation in a way that would make people focus on the thing that is consistent. We have a variable number of characters and people would gain that. They would gain long names that would be a parable to the user. We need to make sure there is effective however text and and averred it was small disclosure. We can see other implementations tested in the field. 

We can provide specific text for doing that. 

Plus the idea of smart disclosure. This was incredibly helpful. I think we can keep talking for another hour but we have another panel behind you. We will conclude for the day. Thank you for joining us today was very helpful. >> 


okay we are back in section everybody. We will reconvene with panel three today and thank you all for joining us this afternoon. Mr. Dan backer counsel for the Coolidge rating foundation , Mr. Victor Berntsen who just took Lindsay Melody away from us and Craig Coleman. We will recombine and thank you all very much for joining us. We will start with Mr. Dan backer. Please whenever you are ready. There we go. Thank you for the opportunity to be here today. As son of you have heard me say and I've often said that no one should have to hire a lawyer to engage in political speech. The stuff is crazy. To the vast majority of Americans the rules proposed here will only make it crazier. The Internet is an ambiguous and unique democratic means of political communication. He gives every American the same opportunity to reach a nationwide audience previously available only for the wealthy, the powerful and the connected political elites. For those elites who can afford to hire lawyers and well-paid commercial vendors the rules you are considering are at most a nuisance in their ability to continue delivering your message. It is individual Americans who benefited the most from virtually unlimited ability to disseminate their own political ideas. They will be burdened by these rules. Bad actors will always act badly. The proposed regulations will really only impact the vast majority of Americans who engage in political speech on the Internet. This will not deter bad actors or corruption. It will only prevent the public speech of Americans. Consequently we would encourage the commission to refrain from imposing new disclaimer regulations on Internet-based communications. The proposed regulations -- to navigate the compliance with the Internet's detail and not particularly intuitive requirements of anybody else. However in the event that the commission cannot stop itself from needlessly regulating these things it should use alternative B as the basis for doing so. I would like to make a few brief points about alternative B. First the commission should pull it protect political speech by ordinary Americans and small individual and grassroots activities by applying the requirements to Internet communications only if they exceed a reasonable threshold level. For example communications that cost more than $1000 or made by speakers that spend more than $2500 individually on such political speeches given in a given year. The regulation should specify any enforcement targeted at individuals should focus on education and correcting future behavior rather than the speeding ticket approach of the administrative fine system that I think some of us are familiar with. The safe harbors are essential to ensure the vast majority of Americans who have no idea what the FEC is up but, may have very strong opinions on their government to not inadvertently violate federal law or need to hire lawyers just to engage in modest levels of political speech. Secondly one of the most important facets of any disclaimer rule is the flexibility to use alternative disclaimers. When default disclaimers would otherwise occupy more than 10% of the time or space of an underlying communication. People who engage in political speech want to convey a message. They're not looking to convey the FEC's message and they ought to be able to to do so with the least amount of disruption to it. We would ask that the FEC need to make sure disclaimers do not swamp and crowd out the political communications to which they are included. An alternative disclaimer provision it for example could be satisfied by the very common approach of an online ad being clickable to a resulting page that required all the FEC identified information or that contained a hyperlink text or URL on the ad that link to such information or as I believe we have already previously done identifying the speaker. One of my clients that I've been here before has www.Great American pack. calm as his URL which identifies a particular speaker. Before we move on I just want to point out that we recently had a question, and vendor offered a client of mine 62nd audio ads on radio. We thought about this and the , we actually tested the recording and is 3.4 seconds just to say the disclaimer. I must fairly quit talking New Yorker. This is a serious problem that forecloses a particular piece of communication and we do not want to extend that burden into the Internet were right now it is not experienced. Finally any regulation that is recognized that there are virtually limitless combinations of hardware software individual settings through Internet political medications may be received by a variety of recipients. Depending on which device, an apple or a sock Samsung, what version of the operating system involves the size of your screen, the layout. Whether you are holding the phone this way or that way and any number of any individualized settings disclaimers might not be clearly and completely visible. For example on the common chrome browser on your phone, on iPhones , there is a function of the browser that lets you strip out a lot of the imagery. If disclaimers containers images he will be stripped out of an ad if a user selected to do so. It is impossible to see --to ensure disclaimers world always appear. Speaker should not be subject to administrative, civil and potentially criminal liability so long as they have made a reasonable, good-faith effort to comply with disclaimer or adapted disclaimer requirements. As I said at the outset no one should have to hire a lawyer to engage in political speech. This commission should regulating --avoid regulating making that witticism a reality. Thank you. 

Thank you. >> Mr. Bernsen. 

All right I managed. Good afternoon commissioners my name is Victor Berntsen I am vice president and general counsel and secretary for the Americans for prosperity and Americans for prosperity foundation. Earlier this month Americans for prosperity consider written comment and accepted the optionee to address you today. I'm honored once again thank all of you. In the written comment we submitted to you we said first and like all of you we believe that Internet speech is part of the free speech. Well recognize it is been instrumental to the flourishing and prosperous nation we are blessed with today. Second we expressed our concern that the two proposed alternatives both a and B would have a burdensome impact on a first amendment protected grassroots activity. Unlike many of the previous panelists I am not a constitutional law specialist. I'm a general counsel residing in a very practical world. My appearance today is on behalf of my organization . Thousands of volunteers and millions of activist who ultimately will be impacted in very real ways by this rulemaking. Mom-and-pop if you will. I'm certain you shared use. Our founders intended political speech to have the highest protected speech from political interference. I plan to focus my remarks on the second stage of concern the burdensome impact of the proposed roles that they would have on our First Amendment grassroots activity. Organization is one of the largest and most influential grassroots organizations in our great nation. With chapters and 36 dates and thousands of volunteers to give freely of their time to attend events and contact citizens who do promote a shared vision of a more free and open society. We also have roughly 3.2 million activist who regularly receive communications. It goes without saying that maintaining a stable of thousands of volunteers and millions of activist is no easy feat. We rely on every communication vehicle at our disposal to maintain our connection with the American people. In this modern age of these communication vehicles features as prominently as Internet. As you well know Internet communications are unique. To garner retention there is barely really time. Mandatory lengthy disclaimer requirements on the face of such communications interview would not only be burdensome to the extreme but, they would likely render them entirely meaningless. Meaningless as the absurd disclaimers on television that accompany pharmaceutical ads. That really must not be the outcome of this hearing. All around us every day we hear nonstop complaining about the lack of citizen involvement in our politics. Many say is the crisis of our time. Dear commissioners the organization I represent , Americans for prosperity is not part of that problem. They are part of the solution. Every day we are busy engaging citizenry and educating them about the importance of public policies on their own lies. On the lives of their children and the lives of their neighbors. We are the actual honest-to- goodness grassroots that most people say they're pining for. We believe the proposed alternatives a and B would make it more difficult to communicating. Long and boring disclaims of advisory communications as I said before would only chase away our fellow citizens. That is an entirely unacceptable outcome and that is what we hear about this rulemaking. We never, ever hide the fact that we are behind communication. We take great pride in our public positions as Empire ads. Every publication we make contains clear and unequivocal information identify an organization. As stated in our written comment to you we do not believe additional regulation of political speech is necessarily warranted. Communications on the Internet are always regulated by this commission. If you do move forward with the new rule we ask you on behalf of millions of grassroot activist we plead with you to please Terrell --Taylor your rule narrowly. Make it the least restrictive approach possible. Utilize and anticipate the best technologies so the people that wish to move beyond simple and direct messages can take an easy extra step to identify the author of the message. The attachment to our comment provides just such an approach. We ask that you please keep it simple. As Shapiro stated earlier today in this context we believe yes is more. Please do not interfere with the grassroots Activision that we all want to see first. Please do not burden our fundamental right for political speech. The First Amendment has safeguarded grassroots political activism for more than 225 years let's keep it that way. Once again I wish to thank you for your time and attention today and I am very happy to take any questions you might have. Thank you. 

Mr. Holman. >> All right I can go with this one. Chair and commissioners thank you very much for letting me testify here. I am delighted that the FEC is undertaking this rulemaking which many of us have been encouraging for decades. You have heard over and over already with the exception apparently of the two people who preceded me that disclosure is the bedrock principle of democracy. I don't want to repeat what you have already heard by others. I want to focus on else is important and what brought before commissioners together to the stable. That is the lack of appropriate disclosure on Internet ads that has been abused and allowed for an intervention in the U.S. elections. That concerns everybody. It requires some sort of new decisive action. We now know that the means that allow this foreign intervention was the lack of disclosure on the Internet. That allowed an opening for Russian involvement in our elections. This has to be addressed . This to me is the key issue, more so than just simple transparency for transparency sake. There are four key steps that I would like to see the FEC take. One is to make sure that all forms of Internet campaign ads must have a disclaimer of some sort . Obviously perhaps because of the federal law it has to be limited to express advocacy ads on the Internet. All forms must have some form of disclaimer. The Internet is a source of innovation , not limitation. By mandating some sort of disclaimer on all forms of Internet ads the Internet program producers will find a way to ensure that they get adequate disclosure going. I strongly recommend carrying over the same types of disclosure requirements that apply to traditional ads. But, there are obviously going to be cases in which that type of full disclosure is not going to be possible. In order to fulfill the mission of making sure that there is adequate disclosure behind these Internet ads it must have at the minimum paid for by on those particular Internet ads. If it does not say it is paid for many viewers are not going to understand that they are not doing news, that they are actually viewing paid propaganda. It must identify the source or sponsor of that ad. A study by Columbia University discovered that 59% of all Internet ads with links are never ever clicked. Electronic privacy center , I believe has already testified, that on average a viewer only about 1% of the time actually clicks onto those links. If there isn't that paid for by as a minimum floor in the Internet campaign ads most people are going to miss that message. I also encourage you to move expeditiously. There are rumors that Russian involvement is already proceeding for the 2018 elections. I know we are already into that election cycle. If we want to address this very serious problem we have got to do so very quickly. Finally and I know this is not part of this rulemaking necessarily but, it really should be. Federal law charges the FEC with enforcing the ban on foreign intervention in elections. As well as imposing disclaimer requirements. As a matter of fact that the Sion rule prohibits disbursements by foreign nationals in connection with elections. In order to get to the heart of this I would recommend that the FEC mandate the establishment of some type of library of all Internet paid advertisements , political advertisements. This is recommended in the honest ads act but, it is also within your purview to do. The Federal Communications Commission has set up such an ad, I mean such a library of all ads in conformance with the federal Communications Act. Even though the law does not require such a library. This is something that you can do. In conclusion I just want to make sure that we focus on the Russian meddling, that is the problem that we are trying to address, and there is widespread agreement across the public that this is a problem. You have received 160,000 comments urging you to move ahead with rulemaking. I would strongly recommend please move swiftly on this and try to be broader in the perspective to address the foreign intervention problem. 

Thank you. 

Mr. Vande Walker . 

Thank you. Good afternoon and behalf of the Brennan Center for Justice I would like to thank the commission for the opportunity to testify today. The Brennan Center is a nonpartisan think tank advocacy organization that focuses on democracy and justice. The FEC's disclaimer role for online ads based in 2006 and is in dire need of an update. Since that time the Internet has changed dramatically has been discussed today. Meanwhile online political advertising has exploded and is sure to Inc. continue to increase. Campaigns and parties and domestic Abbasid groups are spending on more online than ever. But so are foreign powers intent on manipulate American elections. Russian started meddling online in 2014 and never continues today. The next attack could come from North Korea, Iran, China or any other number of potential emissaries. Transparency is a manual common sense form of regulation to put tact against the threat of foreign interference. Much ads on the Internet are effectively exempt from the FEC's disclaimer requirements. This is not healthy for democracy. Audiences have a right to know who paid for advertisements intended to influence the political activity and to know it at the time they are exposed ads. This enables the electric to make and form decisions and give proper weight to speakers messages. Part of that decision-making requires knowing whether the message originated with a foreign power. Disclaimer requirements can enhance the deterrent effect of the foreign band. Often Russian trolls proved willing to violate the ban in 2016 since at least some of the paid ads that have been revealed were undeniably bought in connection with an election. But, the disclaimer rule with broad enough scope to reach all forms of spending on online communications would leave if you are places for foreign agents to hide their communications on foreign elections concerning illegal activity. In addition to spenders for your to include disclaimers should be a red flag. Of course again foreign operatives have the option of lying in a disclaimer. Even fictitious identities provide clues for law enforcement as illustrated by the special councils divan of the Internet research agency employees and affiliates. They tracked back fake identities that were consistently used overtime. For these reasons disclaimer rules should be robust, have broad application to the many ways of spending on the Internet and be vigorously enforced. Brennan Center has embraced three key principles for Internet disclaimer roles. We recommend first the commission should not apply exemptions like those for small items. Technical innovation by online ads should have disclaimers . Second a substantial amount spent on the production of content like production cost for filming a video or polling calls or messaging research should also be part of triggering disclaimer requirements even if the content is posted for free given the enormous power of the Internet. As on YouTube and Twitter and other social media sites. Third disclaimer rule should address a social media users ability to share advertisers paid posts to ensure the disclaimers stay on messages as much as possible even as they are disseminated through unpaid shares through other users. The specific proposals in the MBR of the Brennan Center's supporters alternative pay. We prefer this because it does not include alternative bees statement. Previously we oppose the application of the small items application or symbolist exemptions to online communications. Businesses that sell as an Internet how the incentive and technological purse to conform to disclaimer requirements. Thank you and I'm happy to answer any questions that you may have. ; Thank you very much. Perhaps we should see if Steve or Peterson have any questions. Commissioner Walter? >> In your comments Mr. Bakker about the criticism you have regarding would have to get some clarification regarding the criticism. I heard you saying negative things that were involved in the conduct of what we are doing. But, unless the statute is changed we have to have provisions that comport with the law and that's what ICS is doing here. If you think we are varied from that let me know. What we are trying to do here is simply write a methodology for communication that makes current electronic sophistication . If you think we should make a different direction does she go different direction let me know. >> I'd like to start with a little example. If I wanted to go online right now and say hey I support Walther for Congress and posted on my page. If I decide to press the little button on their that says promote which anyone can do. I would be unable to do so by Facebook. They have implemented a political ad disclaimer model. This essentially requires as I understand it to verify the identity of anyone engaging in political ads which of them is candidate speech which also issue advocacy. I think that is fairly broad. I now have to wait a couple days after having this desire to do this for them to mail me a postcard to go back online to type in the code on the postcard to verify my identity. Having done this now I've got this ad that I want to promote. On the ad there is the image that I want to put up there of you and an American flag and now there's a little icon on this ad that says , it starts giving out information. Is actually information that is required in the disclaimer but because that information is truncated in that little icon in that space I have to still include that information in the disclaimer. In essence I have the same information now on the ad itself and in this thing that is occupying some of the space of my ad. I think the concern that I have is that I think it's important that there be absolute clarity from this commission on what it will and will not, or how Internet ads will be treated. I think it's a real problem when I have to advise a client that no even though this is going to take up more space you cannot do this because it is not the ad on the face of this communication which you are paying to put on somebody else's website and therefore you have to have the disclaimer on it. If it were me I would want to know very clearly what would qualify. When we start looking at the specific puzzles that we put out there is information that is clickable out. Is information that is truncated the way Facebook truncates is that enough ? In the last panel someone noted this art form of grading these ads is that something we can have out there. That we can un-inhibit the art in order to allow the Q mitigation the political statement to be released fully. Maybe it's a small items exception but, in any event I think there needs to be a lot of clarity because Facebook is regulated largely because they do not want to be sued. They do not want to be held in front of Congress and yelled at again. There's a lot of uncertainty. I would welcome uncertainty here. I think it should be the least burdensome application. It should allow people to use common sense approaches. If I have a small ad and I can't fit the disclaimer on it and by the way in a news function that you are looking on on a browser has a little pop up from about eight different vendors now. There is no way you could fit the disclaimer on a political ad down there. I would want to be able to have that clickable to a page that has the appropriate disclaimers. If I get one of those incredibly annoying pop-ups that blocks me from actually seen the thing that is there until you click out the X button as a user I want to get out of that as quickly as possible. As somebody who represents political advertisers I want to have a cleaner system as possible. If my ad is Walther for Congress I want that to be the message click here. Here is the link. Click the box and it will take you to the page. I think my approach , I think I take a more deregulatory approach but I would encourage their comes clarity that comes out of the process. When I am giving advice to clients it is not a 30 page Mento , I can say no you have a link you have clarity you are good. That way people who aren't able to pay for me can decide I want to spend $1000 on this Internet ad because I want to see Walther for Congress. 

This is what we have been talking about all day. 

I think likability is usually a valuable. I don't think you need to have alignment on the added software is not feasible, it's not practical he drowns out the messaging. The sick second radio ad is a great example. The bottom pop-ups on pretty much every new site I go to day in and day out have those little, those little pop-ups that come out of the bottom. There is no way you can pin a disclaimer in that. Click ability I think is essential. If there's going to be rule- making rather than relying intractability are small items I would hope the rule would tend toward the broadest possible application , it would tend towards allowing the flexibility so that is not going to impede individuals ability to communicate a political message. Nobody said just listen to me say no you cannot run an ad because the disclaimer has to be there and that is more than half your time. 

I appreciate that. I think a lot of what you're complaining about is what we've had discussion about. I just want to make that clear. Does she get that clear. 

Any other questions? Then I have a question for Mr. Holbrook and Mr. Vander Walker. Both of you talked about the Russian influence in 2016 elections. If I thought there was something that we could do here that would eliminate that or largely address it I would've done so immediately. I just don't see and I think you said Mr. Holman that it is a huge problem. The house Democrats released this a few weeks ago they released approximately 3500 ads and there were 100 out of those that referenced a federal candidate. I haven't taken the time to look at those hundred ads but I wouldn't be surprised if 100 of them expressed advocacy. We are talking about probably let's say 50 ads at the most that would've required a disclaimer on there. We know based on the indictment that the Russians mask themselves as Americans and so even if there was, even if they were just concerned about the disclaimer rules they would probably have put a fictitious American name on those ads. If they even had express advocacy. The notion that because this issue we need to do something quickly and we need to act with a lot of, we need to make sure we cover all this and there is a new election coming up. I think the foundation of that is weak. We talked a little bit about that on the first panel. I wanted to give you a chance to respond to that. 

I would like to respond very much. I do understand it's a concern of yours. The Republicans on this commission have rather consistently wanted not to start requiring disclosure of Internet ads until suddenly it turned into this problem with foreign intervention. I think we all alike understand that this is a problem that we would like to prevent it from happening. It is correct when it comes to the disclaimers that we are talking about under the disclaimer rule here. It would probably have to apply to express advocacy. Most of the Russian ads were not express advocacy ads. However, nearly taking that step does she merely taking that step and requiring that type of disclaimer greater exposure across the board on the Internet will help put everyone on alert that this is a concern that the Federal election commission and others are trying to address. I believe it would help promote the social media websites to take a more proactive role at regulating this and it would just help the momentum forward. 

The special immediate websites or regulating what? 

Coming up with programs of like creating a library database of the types of ads , what Facebook is trying to move into. They are going broader than that. 

Are you saying they should go broader than that? 

They should try to identify any sort of foreign paid ads that are in connection with the election. As your own regulation tries to address. Yes they should go beyond express advocacy. 

Okay do you think, do you think that the Russians would identify themselves ? It seems like that is not their primary concern is comported with the disclaimer requirements at the FEC. We do have disclaimer requirements now. That is the governing rule. We have multiple , we will discuss this and I know Mr. Berenson and Mr. Bakker you guys both in your practice and in your group have to advise your group and your clients to include disclaimers. Do you advise them to include disclaimers on Internet ads? 

Yes anytime my clients are paying to put a communication on for the election on a website of another which is pretty often to the tunes of hundreds of thousands of dollars a month. I am telling them to put a disclaimer on there if all possible. >> It is possible to they follow that advice? 

Yes thankfully. They are adequately scared about the threat of FEC of enforcement that they're listening to that advice. ; If you say that it is not impossible are you referring to the Google if you are not able to fit it all on there you can provide a link with the additional information. 

I have had two outcomes for this. When I have advised them that they have to do this and there is not a practical means of doing so because that is too small I have said look you have two choices. One run the ad make it clickable. You obviously can't put the disclaimer in those little pop- up newsfeeds. Have a link to a webpage that actually has all the appropriate and normal disclaimers or to do not run the ad. The difference being if you do not run the ad you are minimizing the risk of potential , potentially join an FEC complaint. Even if frivolous and pointless will waste your time and energy. The reality that some clients have it listen to the first advice and have a click through and some have chosen not to engage in a particular form of political speech because they do not want to incur the cost. 

That is unfortunate. 

I would say that our compliance rate is 100%. We have roughly about 85% of our ads are in the issue advocacy category. We always have a disclaimer of some sort. Depending on the place in size of the advertisement some will be on the face, others you can with one stop get right to a landing page and all the information will be there. But, we always stand by everyone of our public communications. When it comes to express advocacy which is probably the 2% of what we do. 

Thank you. Any other questions of this panel? Commissioner Peterson. I'm sorry. >> Mr. Vander Walker you talked about the issue of having the disclaimer travel with the ad as it gets shared. How would you suggest we go about making that happen? 

I would want to ask the platforms to do that because they are the ones that create the ability there are sort of new questions here. If somebody cut out of an ad , a newspaper ad and put it through Xerox machine whatever disclaimer was on it would be in the cut out Xerox thing. So just to take Facebook as the big physical example Facebook creates the ability for any sure --user to share any ad so in creating the possibility they should create a way for disclaimers to follow it. Right now Facebook has its own disclaimer that essentially says this is a paid ad. Once somebody share something that is disclaimer disappears because their logic is that share , let's say if I share and my share is not a paid ad it is just me sharing something on Facebook. The disclaimer disappears. I think whether the --where the message originates as a paid political ad, something should follow it saying where the original payment came from. Because as much as it's a benefit the thing should be shared it multiplies the audience of a paid political ad in a way that again audiences need to know where messages are coming from. 

See you think we could impose a requirement that disclaimers have to be portable with the ad and the platform should have to figure out how to do it. 

Yes because frankly there are a lot of different platforms and the rules world and I think the principal of having share ability not interfere with the transparency that the audience in the voting electorate needs is the important thing. The logistics of it maybe need to work out differently for different technologies. 

You have said is one of the your core principles that I should --should I in fear for that the paid for by will identify the sponsor the ad. 

Yes sponsored --paid for by the sponsor of the ad. Then you can have a link to identify the wealthy special interest. 

Do hell of a lot of wealthy special interest supporting you? 

I do want to emphasize it's got to be that minimum. People do not click on those links. They just do not do that. If it does not say paid for the reader very frequently is not going to understand this is an ad. Benefit doesn't say and identify the sponsor the reader just isn't going to get that. It's got to be a minimum floor. 

I hear you I just wanted to clarify that. We had an earlier witness that said we should just have on the face of the ad, political ad and then you would click on that and get to the place that identified who was behind the political ad. Insane paid for by you do not mean just that you want us to make sure it is identified as a paid ad. It is also the sponsor of the ad. 

Both are critical. You 

You raise an interesting idea that I don't think anybody else raised out of the hundred and 60,000 people that weighed in on that. Good for you for coming up on a unique idea of having a dollar threshold. I will ask a question that I asked somebody earlier. Where does the statutory authority come from for doing that? It's an intriguing idea in general and I been an advocate of reasonable thresholds. Where would the statutory authority come from , would that be accumulative total as opposed to one could buy a whole lot of small ads and it would add up. Each one of them could be -- >> I can probably give you good statutory source. My thinking is more like if you are regulating these particular communications, Internet disclaimers. To the extent that you are already doing so I do not think you need to do so for this minimus level of activity at all. I tend to think that we do not need an increase . My person promoting an idea or a thought for 20 or $30 I should not have to file an FEC report or care about disclaimers to adopt Mr. Holman's idea of hay I want Walther for Congress. I shouldn't have to worry about that. I think when you get to the point of people who are, I do not know that you are worried about people who are trying to game the system that are going to do a lot of $20 expenditures on behalf of different individual candidates of their charges for. I think that level of grassroots participation is healthy and normal and not particularly meaningful and is it worth cluttering our system up. Again I don't have a really good statutory basis for it I just think if you're going to move in that direction the threshold ought to be communications that are going to have some level of impact on political discourse. I chose $1000 because that is the amount of the 24 hour reporting minimum. 

So no particular statutory bases and not cumulative. 

You could do it cumulative. $1000 for an individual candidate 25,000 for all candidates over the course of the year. That is a carveout so people who are underneath that which is probably the majority of people who engage in personal independent political speech they are not going to have to worry about disclaimers and filing FEC reports and worry about that. They will not be under potential enforcement. I do not think we want to interfere with people engaging in relatively minimus speech. 

When I think about cumulative I wasn't thinking necessarily about come I presume if you're spending over of certain threshold to promote a particular candidate but, what if you're just spending a lot of money on a lot of intuitive individual small ads. 

I do not think that requires any sort of disclaimer disclosure. If you're spending $20 because you like Walther for Congress of 20 if you like utter Congress who cares. It is such a diminished level of grassroots activity. It is by the $20 a box a stain on the corner speaking. 

If you're spending $20 1 million times then suddenly it starts to look like you are spending a lot of money. 

If you're going that direction some aggregate across all candidates. Again I chose a random number of $2500. I think we address that in our first second comment. It's less about what the specific floor should be and more about we really don't want to be involved as a government and a society and say everyone who does anything online needs to comply with this particular law . It really matters only when you're dealing with a substantial act. 

When I have a question for everybody. Mr. Brinson you actually went and marked a proposed rule text for us. This was very proactive of you. I would like to invite you since you took a little bit from a and a little bit for me and you made your own edits. I would like to invite you to explain what you're thinking was in doing that and what you think you were accomplishing by the evidence that you made and combining them the way you did. 

Certainly. In a nutshell we were not thrilled with alternative a and we were not thrilled will alternative be. So as we broke them down we figured with a little bit of editing here in a little bit of editing there we might get to a better solution that would address specifically what Commissioner Walter was talking about. The technological sophistication recognizing what is out there today and I think the alternative a an alternative be were just in our view to limiting. There was too much of a straitjacket. The hybrid that we proposed is specifically designed to address the possibility of having a rule that is going to be flexible enough to not only address not only existing sophistication but future technological sophistication. There is one other thing I just wanted to jump in with. I obviously, this is a hearing about disclaimers and that is your purview and it is very important. Again going back to why I am here and talking on behalf of our activists the disclaimer, I really don't think it should be overstated in its importance. It is important , it is not everything. The vast majority of people that I know and I have spoken with who when they are clicking on one of these smaller ads that does not have a full disclaimer on it and they are looking for information they are not looking for who is it is coming from they want to know more about whether the claim and that is true. That is very difficult to regulate. The average person is not all caught up and wound up about disclaimers. They want to know, did that Congress men of mine, did she vote to vote to raise my taxes did she vote in favor of criminal reform. If we are taking an approach that is solely focused on disclaimers here we are going to be pushing those folks away because there is going to be way too much language. An example I'll cite is a very simple one. If I'm communicating with my daughter and I have seen an amazing article by the late great Charles Krauthammer. I want to send it on to her and I send a link there is a very good chance she will click on the link read it and then dad you are wrong because whatever. If I do her the favor, the courtesy of cutting and pasting the whole article and putting it in an email she will not read it. I know why. She's going to say is too long, is too wordy I don't have time for that. It's the exact same article but one was the Lincoln one is all the words. I use that as an analogy here to a disclaimer language. It is important but it is not the be-all and end-all. What folks really care about what they are getting at these ads is hey is that stuff true? They are going to the ballot box to vote for or against the person not for or against an organization or an entity that is running ads behind it. They are looking at the individuals. 

I actually would like to dispute that. I think that part of what you said under my the point you're trying to make it. The reason your daughters? on something you center is because it's comes from you. This is my dad sending me something that might be interesting or maybe not depending on your relationship with your kids. I know my kid sometimes they click and sometimes I don't. She would have a different reaction if I sent her something because she would say who the hell hackers Allen and why should I care what she has to say. The source of information actually does matter to people. If I click on an ad nice it was posted by the Sierra Club or the NRA that tells me something about what perspective that advertiser has and I will draw my own conclusions about whether I trust that ad or not based on who's behind it. I think it informs the decision in the Supreme Court seems to agree with this notion , it informs a decision on whether you are going to trust the veracity of the information based on who is coming from. 

I do not dispute that point from your perspective but I think that is a dangerous path to go down. Making assumptions about where an organization stands because of his name can often be wrong and our organization is a classic example of that. There are a lot of folks out there who disagree with us on certain policies and would go what on earth are they doing supporting criminal justice reform. What on earth are they doing supporting immigration reform. They have already leapt to a conclusion about us just by looking at the name. I do not think that is necessarily fair or about the way a healthy democracy should work. I it's much more important to be able to, look at our website, go in and read where we actually stand and we may reach a different conclusion about the merits of our policies. 

That's an interesting idea but the whole point of disclaimers and the reason that we are talking about disclaimers because we have an obligation under the law to provide information about where the information is coming from. I do not think we are in a position to say what people ought to be focused on or what you think they are focused on our weather is true or not the information they're getting. I do not think we are in a position to provide that kind of verification to anybody. I doubt if you want us to set us up that way. 

No ma'am I am not asking for that at all. 

I don't know whether Mr. Vander Walker Mr. Holman had a chance to look at the proposed regulation that your colleague on the panel divided to us. I will invite you to comment if you have in front of you or know what we're talking about. If not that is fine. 

I do not have specific comments on it. There is a principle here that source transparency is important in the in Decatur idea has been discussed a lot. An indicator may be better than nothing in terms of the disclosure of the source. Care should be taken to make sure the in Decatur actually communicates information to the audience. Because as much as we have talked about First Amendment principles and free-speech principles there are constitutional principles in favor of audiences knowing who is speaking to them. That is an essential part of democracy. The idea of a disclaimer is intended to get at that. Without getting into the details of the regulatory tax proposed we would just point to that principle and the need for audiences to know. You to Commissioner Peterson. 

Thank you Madam chair. I will second what the commissioner said. Mr. Becker what you said about some sort of monetary threshold. I had not really thought about it before. We think about political advertising and traditional political advertising, radio, television, print it. We are thinking generally about somewhat sophisticated operations. They have at least a certain amount of resources available to them. I think to a large extent we are still focused on those in the online --online realm as well. Organizations that have at least enough resources to put together sophisticated graphic spreads are short videos or long videos, the notion of promoted tweets and posts on Facebook getting caught up in the disclaimer morass is a little bit different. You mention you could promote a post for as little as $20. As little as a dollar? In that case we are truly talking about grassroots speech. We are an individual that might feel this is a brilliant paragraph on why this candidate is greater or not. I want to pay a dollar , I do not know how much it all by your $20 buys you. I do not know what the mechanisms are about that way it might be disseminated. In that particular realm we can't always expect those who have decided to pony up that kind of money for a relatively small communication , to have a lawyer, to have this is sophistication the federal campaign act of federal disclosure applies to that particular post or tweet. I think that is a category of speaking that is a little bit different than the category that we normally think about when we think about political advertising. I think that I share the commissioner's concern about the statutory authority that we have. I don't think the commission could adapt up policy based on this discretion that certain political activity under a certain certain threshold should not be something the commission goes after. An interesting point , and it raises a larger point that this rulemaking, that this is addressing is the difference between running ads and engaging in communication, political communication on the Internet. I think that is something for us to consider. I found that intriguing as well. Mr. Vander Walker I want to clarify something and maybe I misheard you during your opening remarks. I thought I heard you say that there is much political , or many political ads that are many political ads that are exempt from disclaimer requirements that are run on the Internet. Is that a fair -- 

There are ads that are effectively exempted by the googly AO and the understanding that certain social media poser Internet activity may not -- 

You are talking about disclaimer on the face of the ad. 

The with the commission decided that is if you are running an ad through some sort of a limitation cannot accommodate the full disclaimer on his face then there is the one click to a landing page. The disclaimer requirement is in effect , you might have to click to it to get there but, just for purposes of clarity the disclaimer requirement hasn't been lifted for that category of events. You said that there should be the application of small items exception or the impact ability of exception. I think I heard you indicate that some sort of adaptive disclaimer or in Decatur would be appropriate under certain circumstances . I think across the board and all the panels today I think everyone has agreed that at some level there are certain types of character restricted texts, small graphic ads, six second YouTube ads that really can't accommodate a full traditional disclaimer and there should be some allowance for an adaptive disclaimer or some sort of indicator in those circumstances. That way those sorts of it communication are available especially to individuals, candidates, committees that may not be as well resourced. But, as we talked about that there has been a wide variety of opinion about what should be the trigger. The second panel except for Professor Kim I think everyone said that in Decatur should in and of itself regardless of how much of a disclaimer takes up of an online ad that should be sufficient to be the disclaimer --meet the disclaimer act. After SQL as the others. I think this is a question the commission is puzzling over very intently. Trying to figure out what is an objective trigger that is easily administered that would be easily understood by those who would be subject to the disclaimer requirements so that we don't have to have numerous speakers coming to the commission to seek an advisory opinion . Proposal a talks about that. You can only go to that adaptive disclaimer or in Decatur if there are technological limitations that are intrinsic to technology. Alternative B talks about a 10% threshold if it goes above that then you can go to an adaptive disclaimer and if it takes over 10% then you go over to an indicator. There has been a lot of pushback on that that that would be not be a very easily implemented standard either. I will start with you but also any others who might want to weigh in on it. If we are going to have some sort of threshold for when an indicator is going to be permissible what do you think would be the best threshold? 

I will say that generally the Brennan Center supports alternative a. It's important that disclaimers be disclaimers and adapted or in Decatur or some lesser form be an absolute backstop, last resort. In terms of inherent limitations , tweets used to be 140 characters in twitter said we can put disclaimers in it because it's 140 characters but now tweets are 280 characters. There are no inherent limitation of characters in tweet. I don't know why they chose that but I assume it has to do with making money. I think there are a few inherent limitations in the space. There are places where companies have decided to create a limitation because that is their business model. They probably have some of the smartest most creative people in the planet --on the planet working on how to write code and I feel like if they want to make money given that this is the law instead of that is the law they will figure out a way to do that. So as a principled matter we think that alternatives to actual disclaimers should be a last resort, a last backstop. 

Do have any idea of that? So you want truly impossible standard? >> The way I understood what you were saying would indicate that we would almost never get there. Almost any communication technology could evolve. Tweets could be 10,000 characters. Six second YouTube ads could be six minutes. Everything ultimately could be altered. That is the way in which we find the nature of the technology right now. There are those limitations for those reasons. It may be a business decision but that is the way the technology has evolved and it has proven to be fairly useful for many people who were communicating. You would draw a pretty narrow allowance for the use of an indicator. Let me open it to many --any of the others who might want to weigh in. Mr. Becker. >> I think it's not so much a limitation of the technical aspect but it's a limitation on the message itself. The purpose of the medication is to convey an idea thought and if you were doing it in a six or 10 second video and you're having to occupy a portion of that with the disclaimer whether it's audio or just a printed disclaimer you are impeding upon the speech that you're trying to convey. I think the 10% rule seems like a really good reasonable measure in order to do that. I mentioned earlier is sick second radio spot which we are now able to buy 3 1/2 seconds of disclaimer is really problematic. It makes it pointless. That's incredibly valuable thing for small organization that can afford a 32nd or 62nd Avenue. Six seconds is cheap. You lose the value of being able to communicate that way. I'm also on some level really uncomfortable with the idea that we are going to start burdening both the political and commercial speech of people in order to say Mr. Vander you are going to have to come up with a system that complies with the standard. That troubles me greatly. I think it gets into a lot of issues outside of just the question of disclaimers and the ability to start and run businesses. I think the 10% rule is a pretty good place to start the conversation. Can I make one comment? Is the Mac Mr. Vander Walker your point about the sheer ability of messages. I just want to point out before I forgot that it's one thing to require a paid speaker to put a disclaimer but I think it's another to require somebody who is personally adopting political speeches their own speech and then we communicating it to that also had to adopt the government mandate. I think that conveyance from the paid speech to the purely voluntary I'm choosing to do this really needs to not include the conveyance of that disclaimer. I think proposes tremendous constitutional infirmity. 

Mr. Holman or Mr. Brinson do you have thoughts on the threshold issue? 

Yes very quickly. I fully understand that the commission wants to and needs to develop some sort of threshold when you go from the full disclosure to the minimal disclosure. That is a question that really you got to ask the techie people. I want to make sure the commission realizes is the danger of anonymous ads and we can't have anonymous Internet ads. I want that minimum floor in their. Then talk to the people who actually develop those types of programs as to where to draw that threshold. 

Mr. Burns. >> We think it's less about establishing a set threshold that could change and so in the proposed rule text that we provided to you we basically said folks can do it either one of two ways. That way if they want to put it on the face so be it. If they want to do an alternative the alternative is using a technological mechanism with an indicator. If the ad is this bigger that big that is just one of two options. You can do it either way. At the end of the day when it's all said and done folks will be able to see the disclaimer language. Either on the face or via the technological means of in Decatur. How and exactly what that threshold is I think we let the market decide. 

I just want to finish. I just want to make one point. As I said earlier I hope there can be a win win solution. This statute speaks clearly about disclaimers and the Supreme Court has upheld disclaimers. The public is entitled to know who was paying for ads that they are viewing. What should also get lost in the mix is the importance of speech that is being conveyed by the ad. The Supreme Court has reiterated over and over political speech about candidates, about those who govern us is at the very core of the First Amendment. There is a tremendous value in the speech itself. If we can develop some sort of a system that was easy to administer that was an objective that would not require anyone who wants to engage in online advertising to come to the agency for advice every time there was a small question that would both enhance the speech itself and also enhanced disclosure information. I've been impressed by some of the discussion we have had about indicators of the ability of information to be , the full paid for information as well as information that you would never get on a radio or television ad that would provide direct lengths to whether it be the FEC website for that committee or whether it might be linked to databases that are run by the particular platform. There are tools in place that can give online users who view ads tools to understand who is paying for those ads in ways that traditional media could not provide. I think the discussion we have had today on all the panels today and with this one as well , I think this is helped us further along this prop thought process. This way we can find some way that the public can get the disclosure information that it demands but it can also get the speech. One does not detract from the other. When you look at some of the sample ads, I look at the speech, it seems to be obscured by the disclaimer the disclaimer seems like a jumble in connection with the speech and if we could have a way in which the speech is clearly conveyed in the disclaimer information is adequately displayed it would be a much better place. Thank you for the very health --helpful addition to the thought process. 

Thank you. Any other questions? 

This is an idea I think that is in use in California. Where if they have very limited space sometimes the information that is required is just the political committees ID number so somebody could come I'm not 100% sure whether it needs to be a click through or whether you're just post to use that in order to go to the fair political practice website and find out whatever you can find out about the committee with that ID number. I just want to toss that out and what you think of that idea. That number does not convey a lot of information for somebody who is just going to look at it. You would have access to all their reports. Of course it would only work if the advertiser was indeed a political committee unless you set up some system of voluntary registration. People who want to do this could apply for a number. It is not clear how informative that would be. Anyway I just thought since that is a system that is in existence somewhere else I toss that out to the panel and see if anybody has any thoughts about that option. 

I would not support it. Even I would blow over and ID number. I really do think the minimum , the minimum standard has to be both identifying that is a paid ad and the name of the sponsor. >> Any meals want to comment. 

I would point out that a couple month ago we were here talking about at great America identification and that would seem to be better identification than an ID number. To Greg's point does it matter that is is paid for by, rate America pack. Does it actually have that magic were paid for by. The goal to minimize is it necessary. Click to the organization it is identified in at least removes that small piece of additional constraint on the underlying message. I think that would probably not be able to achieve with the statute. I don't know the ID number would work really well. 

That's what you want to do but you do not think we have the statutory authority to do that. 

You guys have told me we do not have the statutory authority to do that. 

Mr. Walter do you have any other questions? 

I just have one quick comment or question. Mr. Berntsen's rule is the same one that I believe Mr. Socha proposed in the previous panel. It is a good amalgamation of both of turning the bay an alternative be. I think it may even solve some of the concerns that Mr. Bakker was raising in his opening statement about the platforms that already require a certain amount of information. Obviously Facebook a changes policy but right now my understanding is it requires at the top and bottom of the ad , the wraparound or something, information about who paid for the ad. If we adopted the proposed rule and Mr. Burns --Mr. Berntsen's comment, it allows for the information of the disclaimer or the indicator. or the indicator. The indicator would be within the face of the text and you would not need to have it in both places. I think that solves the issue that Mr. Bakker is bringing up. I think it's her proposal that I would like to consider even further. Thank you for that. I do not have any at additional questions, does anybody else? 

I just want to invite the other panelists who -- 

I think it is. I was comparing the two comments. 

Did he? specifically say we had doorstep proposal . 

I asked him about it he specifically said we had doorstep proposal . That proposed rule text is the same one , am I correct? 

You are correct. 

Okay. Thank you for the clarification. I assume at the end of this hearing we will as we ordinarily do leave the record open for a certain number of days. I would invite the other panelist to take a look at that since the chair wants to consider that and you can email us or Tweet us or whatever mechanism you choose for submitting your comments. It does I will know perpetuate the exception which I think --, Perpich --perpetuate what exception? >> Perpetuate the exception to the requirement. 

Where is that? 

You're right it's still does have it in section 4. >> It has a slight editing but, basically it adopts the exception. I didn't realize that. I was mostly focused on the subsection. 

Every Internet communication for which a disclaimer is at the bottom of, it's at page bottom of page 10 . I have so many comments in front of me but that is the section I was talking about. Yes, yes that is the one I'm talking about. We welcome any additional comments from this panel are the panels that preceded you today. Thank you very much for all of you to come today, your written comments and oral comments and answers to her questions were very helpful. Thank you so much and we will reconvene or hearing tomorrow morning at 930. 

Thank you. 

[ Event Concluded ] 





Okay we are back in section everybody. We will reconvene with panel three today and thank you all for joining us this afternoon. Mr. Dan Backer counsel for the Coolidge rating foundation , Mr. Victor Berntsen who just took Lindsay Melody away from us and Craig Coleman. We will recombine and thank you all very much for joining us. We will start with Mr. Dan backer. Please whenever you are ready. There we go. Thank you for the opportunity to be here today. As son of you have heard me say and I've often said that no one should have to hire a lawyer to engage in political speech. The stuff is crazy. To the vast majority of Americans the rules proposed here will only make it crazier. The Internet is an ambiguous and unique democratic means of political communication. He gives every American the same opportunity to reach a nationwide audience previously available only for the wealthy, the powerful and the connected political elites. For those elites who can afford to hire lawyers and well-paid commercial vendors the rules you are considering are at most a nuisance in their ability to continue delivering your message. It is individual Americans who benefited the most from virtually unlimited ability to disseminate their own political ideas. They will be burdened by these rules. Bad actors will always act badly. The proposed regulations will really only impact the vast majority of Americans who engage in political speech on the Internet. This will not deter bad actors or corruption. It will only prevent the public speech of Americans. Consequently we would encourage the commission to refrain from imposing new disclaimer regulations on Internet-based communications. The proposed regulations -- to navigate the compliance with the Internet's detail and not particularly intuitive requirements of anybody else. However in the event that the commission cannot stop itself from needlessly regulating these things it should use alternative B as the basis for doing so. I would like to make a few brief points about alternative B. First the commission should pull it protect political speech by ordinary Americans and small individual and grassroots activities by applying the requirements to Internet communications only if they exceed a reasonable threshold level. For example communications that cost more than $1000 or made by speakers that spend more than $2500 individually on such political speeches given in a given year. The regulation should specify any enforcement targeted at individuals should focus on education and correcting future behavior rather than the speeding ticket approach of the administrative fine system that I think some of us are familiar with. The safe harbors are essential to ensure the vast majority of Americans who have no idea what the FEC is up but, may have very strong opinions on their government to not inadvertently violate federal law or need to hire lawyers just to engage in modest levels of political speech. Secondly one of the most important facets of any disclaimer rule is the flexibility to use alternative disclaimers. When default disclaimers would otherwise occupy more than 10% of the time or space of an underlying communication. People who engage in political speech want to convey a message. They're not looking to convey the FEC's message and they ought to be able to to do so with the least amount of disruption to it. We would ask that the FEC need to make sure disclaimers do not swamp and crowd out the political communications to which they are included. An alternative disclaimer provision it for example could be satisfied by the very common approach of an online ad being clickable to a resulting page that required all the FEC identified information or that contained a hyperlink text or URL on the ad that link to such information or as I believe we have already previously done identifying the speaker. One of my clients that I've been here before has www.Great American pack. calm as his URL which identifies a particular speaker. Before we move on I just want to point out that we recently had a question, and vendor offered a client of mine 62nd audio ads on radio. We thought about this and the , we actually tested the recording and is 3.4 seconds just to say the disclaimer. I must fairly quit talking New Yorker. This is a serious problem that forecloses a particular piece of communication and we do not want to extend that burden into the Internet were right now it is not experienced. Finally any regulation that is recognized that there are virtually limitless combinations of hardware software individual settings through Internet political medications may be received by a variety of recipients. Depending on which device, an apple or a sock Samsung, what version of the operating system involves the size of your screen, the layout. Whether you are holding the phone this way or that way and any number of any individualized settings disclaimers might not be clearly and completely visible. For example on the common chrome browser on your phone, on iPhones , there is a function of the browser that lets you strip out a lot of the imagery. If disclaimers containers images he will be stripped out of an ad if a user selected to do so. It is impossible to see --to ensure disclaimers world always appear. Speaker should not be subject to administrative, civil and potentially criminal liability so long as they have made a reasonable, good-faith effort to comply with disclaimer or adapted disclaimer requirements. As I said at the outset no one should have to hire a lawyer to engage in political speech. This commission should regulating --avoid regulating making that witticism a reality. Thank you. 

Thank you. >> Mr. Bernsen. 

All right I managed. Good afternoon commissioners my name is Victor Berntsen I am vice president and general counsel and secretary for the Americans for prosperity and Americans for prosperity foundation. Earlier this month Americans for prosperity consider written comment and accepted the optionee to address you today. I'm honored once again thank all of you. In the written comment we submitted to you we said first and like all of you we believe that Internet speech is part of the free speech. Well recognize it is been instrumental to the flourishing and prosperous nation we are blessed with today. Second we expressed our concern that the two proposed alternatives both a and B would have a burdensome impact on a first amendment protected grassroots activity. Unlike many of the previous panelists I am not a constitutional law specialist. I'm a general counsel residing in a very practical world. My appearance today is on behalf of my organization . Thousands of volunteers and millions of activist who ultimately will be impacted in very real ways by this rulemaking. Mom-and-pop if you will. I'm certain you shared use. Our founders intended political speech to have the highest protected speech from political interference. I plan to focus my remarks on the second stage of concern the burdensome impact of the proposed roles that they would have on our First Amendment grassroots activity. Organization is one of the largest and most influential grassroots organizations in our great nation. With chapters and 36 dates and thousands of volunteers to give freely of their time to attend events and contact citizens who do promote a shared vision of a more free and open society. We also have roughly 3.2 million activist who regularly receive communications. It goes without saying that maintaining a stable of thousands of volunteers and millions of activist is no easy feat. We rely on every communication vehicle at our disposal to maintain our connection with the American people. In this modern age of these communication vehicles features as prominently as Internet. As you well know Internet communications are unique. To garner retention there is barely really time. Mandatory lengthy disclaimer requirements on the face of such communications interview would not only be burdensome to the extreme but, they would likely render them entirely meaningless. Meaningless as the absurd disclaimers on television that accompany pharmaceutical ads. That really must not be the outcome of this hearing. All around us every day we hear nonstop complaining about the lack of citizen involvement in our politics. Many say is the crisis of our time. Dear commissioners the organization I represent , Americans for prosperity is not part of that problem. They are part of the solution. Every day we are busy engaging citizenry and educating them about the importance of public policies on their own lies. On the lives of their children and the lives of their neighbors. We are the actual honest-to- goodness grassroots that most people say they're pining for. We believe the proposed alternatives a and B would make it more difficult to communicating. Long and boring disclaims of advisory communications as I said before would only chase away our fellow citizens. That is an entirely unacceptable outcome and that is what we hear about this rulemaking. We never, ever hide the fact that we are behind communication. We take great pride in our public positions as Empire ads. Every publication we make contains clear and unequivocal information identify an organization. As stated in our written comment to you we do not believe additional regulation of political speech is necessarily warranted. Communications on the Internet are always regulated by this commission. If you do move forward with the new rule we ask you on behalf of millions of grassroot activist we plead with you to please Terrell --Taylor your rule narrowly. Make it the least restrictive approach possible. Utilize and anticipate the best technologies so the people that wish to move beyond simple and direct messages can take an easy extra step to identify the author of the message. The attachment to our comment provides just such an approach. We ask that you please keep it simple. As Shapiro stated earlier today in this context we believe yes is more. Please do not interfere with the grassroots Activision that we all want to see first. Please do not burden our fundamental right for political speech. The First Amendment has safeguarded grassroots political activism for more than 225 years let's keep it that way. Once again I wish to thank you for your time and attention today and I am very happy to take any questions you might have. Thank you. 

Mr. Holman. >> All right I can go with this one. Chair and commissioners thank you very much for letting me testify here. I am delighted that the FEC is undertaking this rulemaking which many of us have been encouraging for decades. You have heard over and over already with the exception apparently of the two people who preceded me that disclosure is the bedrock principle of democracy. I don't want to repeat what you have already heard by others. I want to focus on else is important and what brought before commissioners together to the stable. That is the lack of appropriate disclosure on Internet ads that has been abused and allowed for an intervention in the U.S. elections. That concerns everybody. It requires some sort of new decisive action. We now know that the means that allow this foreign intervention was the lack of disclosure on the Internet. That allowed an opening for Russian involvement in our elections. This has to be addressed . This to me is the key issue, more so than just simple transparency for transparency sake. There are four key steps that I would like to see the FEC take. One is to make sure that all forms of Internet campaign ads must have a disclaimer of some sort . Obviously perhaps because of the federal law it has to be limited to express advocacy ads on the Internet. All forms must have some form of disclaimer. The Internet is a source of innovation , not limitation. By mandating some sort of disclaimer on all forms of Internet ads the Internet program producers will find a way to ensure that they get adequate disclosure going. I strongly recommend carrying over the same types of disclosure requirements that apply to traditional ads. But, there are obviously going to be cases in which that type of full disclosure is not going to be possible. In order to fulfill the mission of making sure that there is adequate disclosure behind these Internet ads it must have at the minimum paid for by on those particular Internet ads. If it does not say it is paid for many viewers are not going to understand that they are not doing news, that they are actually viewing paid propaganda. It must identify the source or sponsor of that ad. A study by Columbia University discovered that 59% of all Internet ads with links are never ever clicked. Electronic privacy center , I believe has already testified, that on average a viewer only about 1% of the time actually clicks onto those links. If there isn't that paid for by as a minimum floor in the Internet campaign ads most people are going to miss that message. I also encourage you to move expeditiously. There are rumors that Russian involvement is already proceeding for the 2018 elections. I know we are already into that election cycle. If we want to address this very serious problem we have got to do so very quickly. Finally and I know this is not part of this rulemaking necessarily but, it really should be. Federal law charges the FEC with enforcing the ban on foreign intervention in elections. As well as imposing disclaimer requirements. As a matter of fact that the Sion rule prohibits disbursements by foreign nationals in connection with elections. In order to get to the heart of this I would recommend that the FEC mandate the establishment of some type of library of all Internet paid advertisements , political advertisements. This is recommended in the honest ads act but, it is also within your purview to do. The Federal Communications Commission has set up such an ad, I mean such a library of all ads in conformance with the federal Communications Act. Even though the law does not require such a library. This is something that you can do. In conclusion I just want to make sure that we focus on the Russian meddling, that is the problem that we are trying to address, and there is widespread agreement across the public that this is a problem. You have received 160,000 comments urging you to move ahead with rulemaking. I would strongly recommend please move swiftly on this and try to be broader in the perspective to address the foreign intervention problem. 

Thank you. 

Mr. Vande Walker . 

Thank you. Good afternoon and behalf of the Brennan Center for Justice I would like to thank the commission for the opportunity to testify today. The Brennan Center is a nonpartisan think tank advocacy organization that focuses on democracy and justice. The FEC's disclaimer role for online ads based in 2006 and is in dire need of an update. Since that time the Internet has changed dramatically has been discussed today. Meanwhile online political advertising has exploded and is sure to Inc. continue to increase. Campaigns and parties and domestic Abbasid groups are spending on more online than ever. But so are foreign powers intent on manipulate American elections. Russian started meddling online in 2014 and never continues today. The next attack could come from North Korea, Iran, China or any other number of potential emissaries. Transparency is a manual common sense form of regulation to put tact against the threat of foreign interference. Much ads on the Internet are effectively exempt from the FEC's disclaimer requirements. This is not healthy for democracy. Audiences have a right to know who paid for advertisements intended to influence the political activity and to know it at the time they are exposed ads. This enables the electric to make and form decisions and give proper weight to speakers messages. Part of that decision-making requires knowing whether the message originated with a foreign power. Disclaimer requirements can enhance the deterrent effect of the foreign band. Often Russian trolls proved willing to violate the ban in 2016 since at least some of the paid ads that have been revealed were undeniably bought in connection with an election. But, the disclaimer rule with broad enough scope to reach all forms of spending on online communications would leave if you are places for foreign agents to hide their communications on foreign elections concerning illegal activity. In addition to spenders for your to include disclaimers should be a red flag. Of course again foreign operatives have the option of lying in a disclaimer. Even fictitious identities provide clues for law enforcement as illustrated by the special councils divan of the Internet research agency employees and affiliates. They tracked back fake identities that were consistently used overtime. For these reasons disclaimer rules should be robust, have broad application to the many ways of spending on the Internet and be vigorously enforced. Brennan Center has embraced three key principles for Internet disclaimer roles. We recommend first the commission should not apply exemptions like those for small items. Technical innovation by online ads should have disclaimers . Second a substantial amount spent on the production of content like production cost for filming a video or polling calls or messaging research should also be part of triggering disclaimer requirements even if the content is posted for free given the enormous power of the Internet. As on YouTube and Twitter and other social media sites. Third disclaimer rule should address a social media users ability to share advertisers paid posts to ensure the disclaimers stay on messages as much as possible even as they are disseminated through unpaid shares through other users. The specific proposals in the MBR of the Brennan Center's supporters alternative pay. We prefer this because it does not include alternative bees statement. Previously we oppose the application of the small items application or symbolist exemptions to online communications. Businesses that sell as an Internet how the incentive and technological purse to conform to disclaimer requirements. Thank you and I'm happy to answer any questions that you may have. ; Thank you very much. Perhaps we should see if Steve or Peterson have any questions. Commissioner Walter? >> In your comments Mr. Bakker about the criticism you have regarding would have to get some clarification regarding the criticism. I heard you saying negative things that were involved in the conduct of what we are doing. But, unless the statute is changed we have to have provisions that comport with the law and that's what ICS is doing here. If you think we are varied from that let me know. What we are trying to do here is simply write a methodology for communication that makes current electronic sophistication . If you think we should make a different direction does she go different direction let me know. >> I'd like to start with a little example. If I wanted to go online right now and say hey I support Walther for Congress and posted on my page. If I decide to press the little button on their that says promote which anyone can do. I would be unable to do so by Facebook. They have implemented a political ad disclaimer model. This essentially requires as I understand it to verify the identity of anyone engaging in political ads which of them is candidate speech which also issue advocacy. I think that is fairly broad. I now have to wait a couple days after having this desire to do this for them to mail me a postcard to go back online to type in the code on the postcard to verify my identity. Having done this now I've got this ad that I want to promote. On the ad there is the image that I want to put up there of you and an American flag and now there's a little icon on this ad that says , it starts giving out information. Is actually information that is required in the disclaimer but because that information is truncated in that little icon in that space I have to still include that information in the disclaimer. In essence I have the same information now on the ad itself and in this thing that is occupying some of the space of my ad. I think the concern that I have is that I think it's important that there be absolute clarity from this commission on what it will and will not, or how Internet ads will be treated. I think it's a real problem when I have to advise a client that no even though this is going to take up more space you cannot do this because it is not the ad on the face of this communication which you are paying to put on somebody else's website and therefore you have to have the disclaimer on it. If it were me I would want to know very clearly what would qualify. When we start looking at the specific puzzles that we put out there is information that is clickable out. Is information that is truncated the way Facebook truncates is that enough ? In the last panel someone noted this art form of grading these ads is that something we can have out there. That we can un-inhibit the art in order to allow the Q mitigation the political statement to be released fully. Maybe it's a small items exception but, in any event I think there needs to be a lot of clarity because Facebook is regulated largely because they do not want to be sued. They do not want to be held in front of Congress and yelled at again. There's a lot of uncertainty. I would welcome uncertainty here. I think it should be the least burdensome application. It should allow people to use common sense approaches. If I have a small ad and I can't fit the disclaimer on it and by the way in a news function that you are looking on on a browser has a little pop up from about eight different vendors now. There is no way you could fit the disclaimer on a political ad down there. I would want to be able to have that clickable to a page that has the appropriate disclaimers. If I get one of those incredibly annoying pop-ups that blocks me from actually seen the thing that is there until you click out the X button as a user I want to get out of that as quickly as possible. As somebody who represents political advertisers I want to have a cleaner system as possible. If my ad is Walther for Congress I want that to be the message click here. Here is the link. Click the box and it will take you to the page. I think my approach , I think I take a more deregulatory approach but I would encourage their comes clarity that comes out of the process. When I am giving advice to clients it is not a 30 page Mento , I can say no you have a link you have clarity you are good. That way people who aren't able to pay for me can decide I want to spend $1000 on this Internet ad because I want to see Walther for Congress. 

This is what we have been talking about all day. 

I think likability is usually a valuable. I don't think you need to have alignment on the added software is not feasible, it's not practical he drowns out the messaging. The sick second radio ad is a great example. The bottom pop-ups on pretty much every new site I go to day in and day out have those little, those little pop-ups that come out of the bottom. There is no way you can pin a disclaimer in that. Click ability I think is essential. If there's going to be rule- making rather than relying intractability are small items I would hope the rule would tend toward the broadest possible application , it would tend towards allowing the flexibility so that is not going to impede individuals ability to communicate a political message. Nobody said just listen to me say no you cannot run an ad because the disclaimer has to be there and that is more than half your time. 

I appreciate that. I think a lot of what you're complaining about is what we've had discussion about. I just want to make that clear. Does she get that clear. 

Any other questions? Then I have a question for Mr. Holbrook and Mr. Vander Walker. Both of you talked about the Russian influence in 2016 elections. If I thought there was something that we could do here that would eliminate that or largely address it I would've done so immediately. I just don't see and I think you said Mr. Holman that it is a huge problem. The house Democrats released this a few weeks ago they released approximately 3500 ads and there were 100 out of those that referenced a federal candidate. I haven't taken the time to look at those hundred ads but I wouldn't be surprised if 100 of them expressed advocacy. We are talking about probably let's say 50 ads at the most that would've required a disclaimer on there. We know based on the indictment that the Russians mask themselves as Americans and so even if there was, even if they were just concerned about the disclaimer rules they would probably have put a fictitious American name on those ads. If they even had express advocacy. The notion that because this issue we need to do something quickly and we need to act with a lot of, we need to make sure we cover all this and there is a new election coming up. I think the foundation of that is weak. We talked a little bit about that on the first panel. I wanted to give you a chance to respond to that. 

I would like to respond very much. I do understand it's a concern of yours. The Republicans on this commission have rather consistently wanted not to start requiring disclosure of Internet ads until suddenly it turned into this problem with foreign intervention. I think we all alike understand that this is a problem that we would like to prevent it from happening. It is correct when it comes to the disclaimers that we are talking about under the disclaimer rule here. It would probably have to apply to express advocacy. Most of the Russian ads were not express advocacy ads. However, nearly taking that step does she merely taking that step and requiring that type of disclaimer greater exposure across the board on the Internet will help put everyone on alert that this is a concern that the Federal election commission and others are trying to address. I believe it would help promote the social media websites to take a more proactive role at regulating this and it would just help the momentum forward. 

The special immediate websites or regulating what? 

Coming up with programs of like creating a library database of the types of ads , what Facebook is trying to move into. They are going broader than that. 

Are you saying they should go broader than that? 

They should try to identify any sort of foreign paid ads that are in connection with the election. As your own regulation tries to address. Yes they should go beyond express advocacy. 

Okay do you think, do you think that the Russians would identify themselves ? It seems like that is not their primary concern is comported with the disclaimer requirements at the FEC. We do have disclaimer requirements now. That is the governing rule. We have multiple , we will discuss this and I know Mr. Berenson and Mr. Bakker you guys both in your practice and in your group have to advise your group and your clients to include disclaimers. Do you advise them to include disclaimers on Internet ads? 

Yes anytime my clients are paying to put a communication on for the election on a website of another which is pretty often to the tunes of hundreds of thousands of dollars a month. I am telling them to put a disclaimer on there if all possible. >> It is possible to they follow that advice? 

Yes thankfully. They are adequately scared about the threat of FEC of enforcement that they're listening to that advice. ; If you say that it is not impossible are you referring to the Google if you are not able to fit it all on there you can provide a link with the additional information. 

I have had two outcomes for this. When I have advised them that they have to do this and there is not a practical means of doing so because that is too small I have said look you have two choices. One run the ad make it clickable. You obviously can't put the disclaimer in those little pop- up newsfeeds. Have a link to a webpage that actually has all the appropriate and normal disclaimers or to do not run the ad. The difference being if you do not run the ad you are minimizing the risk of potential , potentially join an FEC complaint. Even if frivolous and pointless will waste your time and energy. The reality that some clients have it listen to the first advice and have a click through and some have chosen not to engage in a particular form of political speech because they do not want to incur the cost. 

That is unfortunate. 

I would say that our compliance rate is 100%. We have roughly about 85% of our ads are in the issue advocacy category. We always have a disclaimer of some sort. Depending on the place in size of the advertisement some will be on the face, others you can with one stop get right to a landing page and all the information will be there. But, we always stand by everyone of our public communications. When it comes to express advocacy which is probably the 2% of what we do. 

Thank you. Any other questions of this panel? Commissioner Peterson. I'm sorry. >> Mr. Vander Walker you talked about the issue of having the disclaimer travel with the ad as it gets shared. How would you suggest we go about making that happen? 

I would want to ask the platforms to do that because they are the ones that create the ability there are sort of new questions here. If somebody cut out of an ad , a newspaper ad and put it through Xerox machine whatever disclaimer was on it would be in the cut out Xerox thing. So just to take Facebook as the big physical example Facebook creates the ability for any sure --user to share any ad so in creating the possibility they should create a way for disclaimers to follow it. Right now Facebook has its own disclaimer that essentially says this is a paid ad. Once somebody share something that is disclaimer disappears because their logic is that share , let's say if I share and my share is not a paid ad it is just me sharing something on Facebook. The disclaimer disappears. I think whether the --where the message originates as a paid political ad, something should follow it saying where the original payment came from. Because as much as it's a benefit the thing should be shared it multiplies the audience of a paid political ad in a way that again audiences need to know where messages are coming from. 

See you think we could impose a requirement that disclaimers have to be portable with the ad and the platform should have to figure out how to do it. 

Yes because frankly there are a lot of different platforms and the rules world and I think the principal of having share ability not interfere with the transparency that the audience in the voting electorate needs is the important thing. The logistics of it maybe need to work out differently for different technologies. 

You have said is one of the your core principles that I should --should I in fear for that the paid for by will identify the sponsor the ad. 

Yes sponsored --paid for by the sponsor of the ad. Then you can have a link to identify the wealthy special interest. 

Do hell of a lot of wealthy special interest supporting you? 

I do want to emphasize it's got to be that minimum. People do not click on those links. They just do not do that. If it does not say paid for the reader very frequently is not going to understand this is an ad. Benefit doesn't say and identify the sponsor the reader just isn't going to get that. It's got to be a minimum floor. 

I hear you I just wanted to clarify that. We had an earlier witness that said we should just have on the face of the ad, political ad and then you would click on that and get to the place that identified who was behind the political ad. Insane paid for by you do not mean just that you want us to make sure it is identified as a paid ad. It is also the sponsor of the ad. 

Both are critical. You 

You raise an interesting idea that I don't think anybody else raised out of the hundred and 60,000 people that weighed in on that. Good for you for coming up on a unique idea of having a dollar threshold. I will ask a question that I asked somebody earlier. Where does the statutory authority come from for doing that? It's an intriguing idea in general and I been an advocate of reasonable thresholds. Where would the statutory authority come from , would that be accumulative total as opposed to one could buy a whole lot of small ads and it would add up. Each one of them could be -- >> I can probably give you good statutory source. My thinking is more like if you are regulating these particular communications, Internet disclaimers. To the extent that you are already doing so I do not think you need to do so for this minimus level of activity at all. I tend to think that we do not need an increase . My person promoting an idea or a thought for 20 or $30 I should not have to file an FEC report or care about disclaimers to adopt Mr. Holman's idea of hay I want Walther for Congress. I shouldn't have to worry about that. I think when you get to the point of people who are, I do not know that you are worried about people who are trying to game the system that are going to do a lot of $20 expenditures on behalf of different individual candidates of their charges for. I think that level of grassroots participation is healthy and normal and not particularly meaningful and is it worth cluttering our system up. Again I don't have a really good statutory basis for it I just think if you're going to move in that direction the threshold ought to be communications that are going to have some level of impact on political discourse. I chose $1000 because that is the amount of the 24 hour reporting minimum. 

So no particular statutory bases and not cumulative. 

You could do it cumulative. $1000 for an individual candidate 25,000 for all candidates over the course of the year. That is a carveout so people who are underneath that which is probably the majority of people who engage in personal independent political speech they are not going to have to worry about disclaimers and filing FEC reports and worry about that. They will not be under potential enforcement. I do not think we want to interfere with people engaging in relatively minimus speech. 

When I think about cumulative I wasn't thinking necessarily about come I presume if you're spending over of certain threshold to promote a particular candidate but, what if you're just spending a lot of money on a lot of intuitive individual small ads. 

I do not think that requires any sort of disclaimer disclosure. If you're spending $20 because you like Walther for Congress of 20 if you like utter Congress who cares. It is such a diminished level of grassroots activity. It is by the $20 a box a stain on the corner speaking. 

If you're spending $20 1 million times then suddenly it starts to look like you are spending a lot of money. 

If you're going that direction some aggregate across all candidates. Again I chose a random number of $2500. I think we address that in our first second comment. It's less about what the specific floor should be and more about we really don't want to be involved as a government and a society and say everyone who does anything online needs to comply with this particular law . It really matters only when you're dealing with a substantial act. 

When I have a question for everybody. Mr. Brinson you actually went and marked a proposed rule text for us. This was very proactive of you. I would like to invite you since you took a little bit from a and a little bit for me and you made your own edits. I would like to invite you to explain what you're thinking was in doing that and what you think you were accomplishing by the evidence that you made and combining them the way you did. 

Certainly. In a nutshell we were not thrilled with alternative a and we were not thrilled will alternative be. So as we broke them down we figured with a little bit of editing here in a little bit of editing there we might get to a better solution that would address specifically what Commissioner Walter was talking about. The technological sophistication recognizing what is out there today and I think the alternative a an alternative be were just in our view to limiting. There was too much of a straitjacket. The hybrid that we proposed is specifically designed to address the possibility of having a rule that is going to be flexible enough to not only address not only existing sophistication but future technological sophistication. There is one other thing I just wanted to jump in with. I obviously, this is a hearing about disclaimers and that is your purview and it is very important. Again going back to why I am here and talking on behalf of our activists the disclaimer, I really don't think it should be overstated in its importance. It is important , it is not everything. The vast majority of people that I know and I have spoken with who when they are clicking on one of these smaller ads that does not have a full disclaimer on it and they are looking for information they are not looking for who is it is coming from they want to know more about whether the claim and that is true. That is very difficult to regulate. The average person is not all caught up and wound up about disclaimers. They want to know, did that Congress men of mine, did she vote to vote to raise my taxes did she vote in favor of criminal reform. If we are taking an approach that is solely focused on disclaimers here we are going to be pushing those folks away because there is going to be way too much language. An example I'll cite is a very simple one. If I'm communicating with my daughter and I have seen an amazing article by the late great Charles Krauthammer. I want to send it on to her and I send a link there is a very good chance she will click on the link read it and then dad you are wrong because whatever. If I do her the favor, the courtesy of cutting and pasting the whole article and putting it in an email she will not read it. I know why. She's going to say is too long, is too wordy I don't have time for that. It's the exact same article but one was the Lincoln one is all the words. I use that as an analogy here to a disclaimer language. It is important but it is not the be-all and end-all. What folks really care about what they are getting at these ads is hey is that stuff true? They are going to the ballot box to vote for or against the person not for or against an organization or an entity that is running ads behind it. They are looking at the individuals. 

I actually would like to dispute that. I think that part of what you said under my the point you're trying to make it. The reason your daughters? on something you center is because it's comes from you. This is my dad sending me something that might be interesting or maybe not depending on your relationship with your kids. I know my kid sometimes they click and sometimes I don't. She would have a different reaction if I sent her something because she would say who the hell hackers Allen and why should I care what she has to say. The source of information actually does matter to people. If I click on an ad nice it was posted by the Sierra Club or the NRA that tells me something about what perspective that advertiser has and I will draw my own conclusions about whether I trust that ad or not based on who's behind it. I think it informs the decision in the Supreme Court seems to agree with this notion , it informs a decision on whether you are going to trust the veracity of the information based on who is coming from. 

I do not dispute that point from your perspective but I think that is a dangerous path to go down. Making assumptions about where an organization stands because of his name can often be wrong and our organization is a classic example of that. There are a lot of folks out there who disagree with us on certain policies and would go what on earth are they doing supporting criminal justice reform. What on earth are they doing supporting immigration reform. They have already leapt to a conclusion about us just by looking at the name. I do not think that is necessarily fair or about the way a healthy democracy should work. I it's much more important to be able to, look at our website, go in and read where we actually stand and we may reach a different conclusion about the merits of our policies. 

That's an interesting idea but the whole point of disclaimers and the reason that we are talking about disclaimers because we have an obligation under the law to provide information about where the information is coming from. I do not think we are in a position to say what people ought to be focused on or what you think they are focused on our weather is true or not the information they're getting. I do not think we are in a position to provide that kind of verification to anybody. I doubt if you want us to set us up that way. 

No ma'am I am not asking for that at all. 

I don't know whether Mr. Vander Walker Mr. Holman had a chance to look at the proposed regulation that your colleague on the panel divided to us. I will invite you to comment if you have in front of you or know what we're talking about. If not that is fine. 

I do not have specific comments on it. There is a principle here that source transparency is important in the in Decatur idea has been discussed a lot. An indicator may be better than nothing in terms of the disclosure of the source. Care should be taken to make sure the in Decatur actually communicates information to the audience. Because as much as we have talked about First Amendment principles and free-speech principles there are constitutional principles in favor of audiences knowing who is speaking to them. That is an essential part of democracy. The idea of a disclaimer is intended to get at that. Without getting into the details of the regulatory tax proposed we would just point to that principle and the need for audiences to know. You to Commissioner Peterson. 

Thank you Madam chair. I will second what the commissioner said. Mr. Becker what you said about some sort of monetary threshold. I had not really thought about it before. We think about political advertising and traditional political advertising, radio, television, print it. We are thinking generally about somewhat sophisticated operations. They have at least a certain amount of resources available to them. I think to a large extent we are still focused on those in the online --online realm as well. Organizations that have at least enough resources to put together sophisticated graphic spreads are short videos or long videos, the notion of promoted tweets and posts on Facebook getting caught up in the disclaimer morass is a little bit different. You mention you could promote a post for as little as $20. As little as a dollar? In that case we are truly talking about grassroots speech. We are an individual that might feel this is a brilliant paragraph on why this candidate is greater or not. I want to pay a dollar , I do not know how much it all by your $20 buys you. I do not know what the mechanisms are about that way it might be disseminated. In that particular realm we can't always expect those who have decided to pony up that kind of money for a relatively small communication , to have a lawyer, to have this is sophistication the federal campaign act of federal disclosure applies to that particular post or tweet. I think that is a category of speaking that is a little bit different than the category that we normally think about when we think about political advertising. I think that I share the commissioner's concern about the statutory authority that we have. I don't think the commission could adapt up policy based on this discretion that certain political activity under a certain certain threshold should not be something the commission goes after. An interesting point , and it raises a larger point that this rulemaking, that this is addressing is the difference between running ads and engaging in communication, political communication on the Internet. I think that is something for us to consider. I found that intriguing as well. Mr. Vander Walker I want to clarify something and maybe I misheard you during your opening remarks. I thought I heard you say that there is much political , or many political ads that are many political ads that are exempt from disclaimer requirements that are run on the Internet. Is that a fair -- 

There are ads that are effectively exempted by the googly AO and the understanding that certain social media poser Internet activity may not -- 

You are talking about disclaimer on the face of the ad. 

The with the commission decided that is if you are running an ad through some sort of a limitation cannot accommodate the full disclaimer on his face then there is the one click to a landing page. The disclaimer requirement is in effect , you might have to click to it to get there but, just for purposes of clarity the disclaimer requirement hasn't been lifted for that category of events. You said that there should be the application of small items exception or the impact ability of exception. I think I heard you indicate that some sort of adaptive disclaimer or in Decatur would be appropriate under certain circumstances . I think across the board and all the panels today I think everyone has agreed that at some level there are certain types of character restricted texts, small graphic ads, six second YouTube ads that really can't accommodate a full traditional disclaimer and there should be some allowance for an adaptive disclaimer or some sort of indicator in those circumstances. That way those sorts of it communication are available especially to individuals, candidates, committees that may not be as well resourced. But, as we talked about that there has been a wide variety of opinion about what should be the trigger. The second panel except for Professor Kim I think everyone said that in Decatur should in and of itself regardless of how much of a disclaimer takes up of an online ad that should be sufficient to be the disclaimer --meet the disclaimer act. After SQL as the others. I think this is a question the commission is puzzling over very intently. Trying to figure out what is an objective trigger that is easily administered that would be easily understood by those who would be subject to the disclaimer requirements so that we don't have to have numerous speakers coming to the commission to seek an advisory opinion . Proposal a talks about that. You can only go to that adaptive disclaimer or in Decatur if there are technological limitations that are intrinsic to technology. Alternative B talks about a 10% threshold if it goes above that then you can go to an adaptive disclaimer and if it takes over 10% then you go over to an indicator. There has been a lot of pushback on that that that would be not be a very easily implemented standard either. I will start with you but also any others who might want to weigh in on it. If we are going to have some sort of threshold for when an indicator is going to be permissible what do you think would be the best threshold? 

I will say that generally the Brennan Center supports alternative a. It's important that disclaimers be disclaimers and adapted or in Decatur or some lesser form be an absolute backstop, last resort. In terms of inherent limitations , tweets used to be 140 characters in twitter said we can put disclaimers in it because it's 140 characters but now tweets are 280 characters. There are no inherent limitation of characters in tweet. I don't know why they chose that but I assume it has to do with making money. I think there are a few inherent limitations in the space. There are places where companies have decided to create a limitation because that is their business model. They probably have some of the smartest most creative people in the planet --on the planet working on how to write code and I feel like if they want to make money given that this is the law instead of that is the law they will figure out a way to do that. So as a principled matter we think that alternatives to actual disclaimers should be a last resort, a last backstop. 

Do have any idea of that? So you want truly impossible standard? >> The way I understood what you were saying would indicate that we would almost never get there. Almost any communication technology could evolve. Tweets could be 10,000 characters. Six second YouTube ads could be six minutes. Everything ultimately could be altered. That is the way in which we find the nature of the technology right now. There are those limitations for those reasons. It may be a business decision but that is the way the technology has evolved and it has proven to be fairly useful for many people who were communicating. You would draw a pretty narrow allowance for the use of an indicator. Let me open it to many --any of the others who might want to weigh in. Mr. Becker. >> I think it's not so much a limitation of the technical aspect but it's a limitation on the message itself. The purpose of the medication is to convey an idea thought and if you were doing it in a six or 10 second video and you're having to occupy a portion of that with the disclaimer whether it's audio or just a printed disclaimer you are impeding upon the speech that you're trying to convey. I think the 10% rule seems like a really good reasonable measure in order to do that. I mentioned earlier is sick second radio spot which we are now able to buy 3 1/2 seconds of disclaimer is really problematic. It makes it pointless. That's incredibly valuable thing for small organization that can afford a 32nd or 62nd Avenue. Six seconds is cheap. You lose the value of being able to communicate that way. I'm also on some level really uncomfortable with the idea that we are going to start burdening both the political and commercial speech of people in order to say Mr. Vander you are going to have to come up with a system that complies with the standard. That troubles me greatly. I think it gets into a lot of issues outside of just the question of disclaimers and the ability to start and run businesses. I think the 10% rule is a pretty good place to start the conversation. Can I make one comment? Is the Mac Mr. Vander Walker your point about the sheer ability of messages. I just want to point out before I forgot that it's one thing to require a paid speaker to put a disclaimer but I think it's another to require somebody who is personally adopting political speeches their own speech and then we communicating it to that also had to adopt the government mandate. I think that conveyance from the paid speech to the purely voluntary I'm choosing to do this really needs to not include the conveyance of that disclaimer. I think proposes tremendous constitutional infirmity. 

Mr. Holman or Mr. Brinson do you have thoughts on the threshold issue? 

Yes very quickly. I fully understand that the commission wants to and needs to develop some sort of threshold when you go from the full disclosure to the minimal disclosure. That is a question that really you got to ask the techie people. I want to make sure the commission realizes is the danger of anonymous ads and we can't have anonymous Internet ads. I want that minimum floor in their. Then talk to the people who actually develop those types of programs as to where to draw that threshold. 

Mr. Burns. >> We think it's less about establishing a set threshold that could change and so in the proposed rule text that we provided to you we basically said folks can do it either one of two ways. That way if they want to put it on the face so be it. If they want to do an alternative the alternative is using a technological mechanism with an indicator. If the ad is this bigger that big that is just one of two options. You can do it either way. At the end of the day when it's all said and done folks will be able to see the disclaimer language. Either on the face or via the technological means of in Decatur. How and exactly what that threshold is I think we let the market decide. 

I just want to finish. I just want to make one point. As I said earlier I hope there can be a win win solution. This statute speaks clearly about disclaimers and the Supreme Court has upheld disclaimers. The public is entitled to know who was paying for ads that they are viewing. What should also get lost in the mix is the importance of speech that is being conveyed by the ad. The Supreme Court has reiterated over and over political speech about candidates, about those who govern us is at the very core of the First Amendment. There is a tremendous value in the speech itself. If we can develop some sort of a system that was easy to administer that was an objective that would not require anyone who wants to engage in online advertising to come to the agency for advice every time there was a small question that would both enhance the speech itself and also enhanced disclosure information. I've been impressed by some of the discussion we have had about indicators of the ability of information to be , the full paid for information as well as information that you would never get on a radio or television ad that would provide direct lengths to whether it be the FEC website for that committee or whether it might be linked to databases that are run by the particular platform. There are tools in place that can give online users who view ads tools to understand who is paying for those ads in ways that traditional media could not provide. I think the discussion we have had today on all the panels today and with this one as well , I think this is helped us further along this prop thought process. This way we can find some way that the public can get the disclosure information that it demands but it can also get the speech. One does not detract from the other. When you look at some of the sample ads, I look at the speech, it seems to be obscured by the disclaimer the disclaimer seems like a jumble in connection with the speech and if we could have a way in which the speech is clearly conveyed in the disclaimer information is adequately displayed it would be a much better place. Thank you for the very health --helpful addition to the thought process. 

Thank you. Any other questions? 

This is an idea I think that is in use in California. Where if they have very limited space sometimes the information that is required is just the political committees ID number so somebody could come I'm not 100% sure whether it needs to be a click through or whether you're just post to use that in order to go to the fair political practice website and find out whatever you can find out about the committee with that ID number. I just want to toss that out and what you think of that idea. That number does not convey a lot of information for somebody who is just going to look at it. You would have access to all their reports. Of course it would only work if the advertiser was indeed a political committee unless you set up some system of voluntary registration. People who want to do this could apply for a number. It is not clear how informative that would be. Anyway I just thought since that is a system that is in existence somewhere else I toss that out to the panel and see if anybody has any thoughts about that option. 

I would not support it. Even I would blow over and ID number. I really do think the minimum , the minimum standard has to be both identifying that is a paid ad and the name of the sponsor. >> Any meals want to comment. 

I would point out that a couple month ago we were here talking about at great America identification and that would seem to be better identification than an ID number. To Greg's point does it matter that is is paid for by, rate America pack. Does it actually have that magic were paid for by. The goal to minimize is it necessary. Click to the organization it is identified in at least removes that small piece of additional constraint on the underlying message. I think that would probably not be able to achieve with the statute. I don't know the ID number would work really well. 

That's what you want to do but you do not think we have the statutory authority to do that. 

You guys have told me we do not have the statutory authority to do that. 

Mr. Walter do you have any other questions? 

I just have one quick comment or question. Mr. Berntsen's rule is the same one that I believe Mr. Socha proposed in the previous panel. It is a good amalgamation of both of turning the bay an alternative be. I think it may even solve some of the concerns that Mr. Bakker was raising in his opening statement about the platforms that already require a certain amount of information. Obviously Facebook a changes policy but right now my understanding is it requires at the top and bottom of the ad , the wraparound or something, information about who paid for the ad. If we adopted the proposed rule and Mr. Burns --Mr. Berntsen's comment, it allows for the information of the disclaimer or the indicator. or the indicator. The indicator would be within the face of the text and you would not need to have it in both places. I think that solves the issue that Mr. Bakker is bringing up. I think it's her proposal that I would like to consider even further. Thank you for that. I do not have any at additional questions, does anybody else? 

I just want to invite the other panelists who -- 

I think it is. I was comparing the two comments. 

Did he? specifically say we had doorstep proposal . 

I asked him about it he specifically said we had doorstep proposal . That proposed rule text is the same one , am I correct? 

You are correct. 

Okay. Thank you for the clarification. I assume at the end of this hearing we will as we ordinarily do leave the record open for a certain number of days. I would invite the other panelist to take a look at that since the chair wants to consider that and you can email us or Tweet us or whatever mechanism you choose for submitting your comments. It does I will know perpetuate the exception which I think --, Perpich --perpetuate what exception? >> Perpetuate the exception to the requirement. 

Where is that? 

You're right it's still does have it in section 4. >> It has a slight editing but, basically it adopts the exception. I didn't realize that. I was mostly focused on the subsection. 

Every Internet communication for which a disclaimer is at the bottom of, it's at page bottom of page 10 . I have so many comments in front of me but that is the section I was talking about. Yes, yes that is the one I'm talking about. We welcome any additional comments from this panel are the panels that preceded you today. Thank you very much for all of you to come today, your written comments and oral comments and answers to her questions were very helpful. Thank you so much and we will reconvene or hearing tomorrow morning at 930. 

Thank you. 

[ Event Concluded ] 





>> Good morning everybody. Welcome to day 2 of our hearing on internet disclaimers and definitions of "public communication" . Beginning with internet disclaimers , we have Christine Bannan policy fellow from the private information center. Doug Hochberg, chief digital director of the Republican National Committee. Chris Nolan , chief executive officer the yellow light will go on when you have one minute left. Start wrapping up your comments and that would be great. We will go alphabetically and start with miss Bannan. 

>> madam chair, vice chair of the commission, thank you for the opportunity to testify today. I am an attorney at EPIC , a public interest research center established in 1994 . I want to begin my testimony by stating a simple principle. That users should know why they are targeted for an add-in who is paying for it. Some commenters have argued that there is a fundamental difference between internet advertising and traditional advertising that justifies [indiscernible]. I agree there is a fundamental difference between online ads and traditional ads. The difference is that online ads can be micro-targeted by gender race, orientation and anything you liked on line. However this requires more scrutiny from the fec not less. At the least they should require as much transparency for internet -based advertising as they do for traditional print and broadcast advertising. For this reason I will turn today is a strong proposal. Whenever feasible include a disclaimer on the communication on who's paying for the ad. This should be a default to ensure everyone who sees the ad will also see the disclaimer. As is on traditional media and alternative a allows disclaimers when a traditional disclaimer would not be feasible using technological mechanisms such as links and pop-up screens. This allows users to navigate to a different screen. The vast majority of internet ads [indiscernible] one percent. If a user is required to navigate to a different page, less than one percent will see the disclaimer. This should be the exception and not the rule. If the fec adopts the exception an alternative feed that allows advertisements without any form of disclaimer or indicator it would undercut the rest of the rule . While it is true there may be forms of advertising that are incompatible with the technical logical methods, this does not mean there will not be other technological methods of disclosing information to users. Alternative b relies on this assuming future ads are not well-suited to adapt disclaimers. Like hover over mechanisms or pop-up screens. Where you're unable to include a disclaimer that as long as fec does not mandate specific types of mechanisms that can be used for adaptive disclaimers, companies will be able to develop new types of disclaimers with their innovative ads and alternative fee exception will discourage appetizers -- advertisers from [indiscernible] disclosure. Developing new methods of advertising are also innovative to develop disclaimers without technology. They should not remove . Disclosing the funders of political ads to users. Advertisers are experts in capturing the attention of internet users and they should use their expertise to disclose important information to the target of their add . The supreme court has held that the government informational interest is sufficient to justify disclaimer requirements even when a speaker claims that the inclusion of a disclaimer decreases both the quantity of the group speech. Therefore arguments that the fec's proposed rules would burden the effectiveness of the ad are insufficient to justify changing the disclaimer requirement. The government informational interest to prevent corruption or the appearance of corruption, is even stronger for internet advertisement because they are micro-targeted did the fec should not aggregate that interest. Disclaimer rules for internet communication are necessary to protect transparency and campaign advertising expenditures. However in order for these measures to be effective advertisers should also be required to disclose their political ads. Transparency is the public's right to know how they are being targeted and by whom. Advertisers are able to reach users based on the intimate details of their add --their lives. Voters should know why they are being targeted by a particular message did now more than ever it's crucial that americans are able to [indiscernible] epic urges the fec to establish a rule that requires disclaimers to provide as much information to users as the rules for traditional media require. And does not allow an exception. Thank you again for the opportunity to testify. I am happy to answer any questions. 

Thank you very much. Mr. Doug Hochberg . 

Thank you for inviting me here to testify on this. My name is Doug Hochberg, the chief digital officer at the republican national committee. You have my written testimony. I want to cover a few basic points and answer any questions afterwards. The first is I want to be very clear, I want people to know who is buying the ads we are seeing online. A goal that every good advertiser wants to have in the political space. We may come to different conclusions on how to display this pain for the ads , but I want the user to have that ability. And secondly , I realize it's a difficult task for you. The roles that come out of these hearings have to be able to be used for 5 to 10 years in the future, and we don't know what type of ads are going to be available 10 years from now. If we look back 5 to 10 years in the past, and types I used today to get out the vote campaigns, those were not available back then. So to create new roles that are going to be used in the future I think there's a couple of things we should take into account. First is they have to be tech gnostic. Meaning whatever we come up with, whatever you create as the new rules for us to follow, we have to be on every platform we currently use and those that we don't even know to use yet. That is one piece of it . As well as having, a new term from me, bright line rules . -- a new term for me. I only know it from the results I get from it, which is usually you cannot run this ad because we don't know if there is a ruling on it . And campaigns have a tendency to move so fast, especially in september, october, november, but there is not time for an advisor ruling. And usually good actors on campaigns and committees , if there's a question about an ad that will be struck down by the fec, usually the answer is we will not run that ad did so to give us those clear rules on what's available to us is a very important piece. And finally, I think we are in agreement, online ads are inherently different than tv, radio and mail ads. Giving the user more of an experience, the ability to click, like , share, pause the ad and interact with it in ways you don't get in tv and radio. For that reason I don't think we should be considering that in the same categories. For instance, if you don't hear the end of the disclaimer of a tv ad, or you don't see that piece of it, you can mute a television during a commercial break, you don't know who is running the ad is clearly. Most people won't go back and rewind their television to see who ran that ad . On a computer or your phone when you see the ads appear in front of you, you can click on it, scroll back up to see the ad. There's a lot of options that have the user, that the user has that you don't have the ability on radio or television. For those reasons in general, we would like to advocate for at least a one click rule. Something that has been used in the past. Where the disclaimer for who's running the ad is never more than one click away from the user. For us this satisfies a lot of time requirements. It doesn't put a burden on companies to develop other pieces that they don't have. And it doesn't put advertisers and users , people buying the ads, in a difficult situation of not knowing if a facebook or google or twitter , or any other ad company, is going to satisfy requirements for you that inherently make it unavailable for us and on companies . I am happy to answer any questions you have. And it doesn't put advertisers and users, people buying the ad in a difficult situation of not knowing if a facebook or google , or twitter, or any other ad company is going to satisfy the requirement for you. That inherently make it unavailable for us. I am happy to answer any questions you have, thank you . 

>> we work for republicans and democrats. We are here today with vendors with 10 years of market experience. As such the responses today are tailored to focus on commissions and programs where we fill our experience can be the most help . Over the past four years as political consulting campaigns have come to understand the internet, it's difficult to reach and target, yes, it's not hard to notice disturbing trends . I would like to highlight two today. The first is the widespread use of programmatic or automatic add bots, [indiscernible] rampant in the ecosystem. Our experience in this arena makes spot on [indiscernible] any disclosure seems suggested by the commissions or congress will have the desired impact. Our experience is the programmatic [indiscernible] political speech is another brand silo, to react as quickly as possible. Oversight is minimal. We have difficulty seeing how badges, written disclaimers or other disclaimer requirements [indiscernible]. It is a core system . Frequently compared to high-tech software today. There is one big difference, wall street has lots of rules. When it comes to direct placement and wall garden such as facebook or spotted by. Outlets of all types are creating their own rules defining what they think is appropriate speech, often examining sources of websites using subjective criteria without regard to the law . Few exceptions are permitted and it's often impossible to take written policies or guidelines beyond oh we just don't do that. Facebook's regulatory screen the best scheme exposed late last night the best month , part of the ad hock ruling. A series of rules like in California, encourages others to set their own rules some of which we have outlined in the comments. These are somewhat understandable's . None of these public traded [indiscernible]. The brand centric models they come up with are not accompanying [indiscernible] in short with a hodgepodge of arbitrary rules is creating a chilling effect that we think will snowball. Given this environment , spot on his recommending the commission and other agencies look not just to disclosures and disclaimers but the behavior of advertisers considering in the future of structured roles. Almost all political and advocacy efforts try to impact the elections, using publicly available voter registration information to target ads. This is the one element all political campaigns have in common, and it sets us apart from brand advertisers. What if the commission were to adopt a scheme for the use of this requirement publishers selling platforms, to segregate advertisers from other and advertising track it. It would be easier and [indiscernible] disclaimer requirements for respondents to be political in nature. This moves away from discussions of a regulatory scheme that is a republican colleague on this panel said elegantly, there are many ad formats on the ad , it remains constant and can be easily tracked. If you're an active voter there should be roles for everybody. Using voting triggering , when they purchased tv, radio or print ads. For trackers familiar with roles and obligations, for the carriage of these messages. This would certainly have a clarifying effect on the advertising platforms and set base rules for others. This by no means means one size fits all for these difficult problems. Spot-on sees the device as a starting point for more thorough conversation about the using of these for speech on the internet. We realize it's a different perspective than those expressed by other panelists. It is worthy of consideration within and outside the commission. Thank you for your time today and I look forward to your questions. 

Thank you very much Chris  Nolan . 

>> miss  Nolan  can you spell this out a little bit more, exactly what would this regulation look like ? 

I am not a lawyer , constitutional or otherwise . But I could make a few suggestions. When you go to purchase advertising, Doug Hochberg can talk about this more practical than I can . As a potential client for example. When you go to purchase online advertising, you can do so in demographic of the --buckets. Micro-targeting . As a result of that , your ads are directed to certain individuals. For example I might be able to reach young women in their 30s living in this area that are registered republicans . Just to give an example. 

That is a small bucket. 

Nevertheless, that is micro- targeting. 

When you do that, you have to purchase that information . Or you can bring it to your platform with what is called first party data. Email list you have collected. The idea is as soon as you do that, as soon as your ad starts that, which a publisher would see, which isa buying platform would see, you are with people selling cars --not with the people selling cars and soda. 

I am not sure about that actually. I could envision somebody using, using used-car data as an example. People who by previous, 

That's already being done to 

But if you're trying to segregate out people who are targeting advertises who are trying to target folks for political ads, how do you segregate out the overtly , a voter registration database, which that part is easy. From somebody who buys the database, who by a previous, inc. It's a proxy for a good voter. One point and thinking about this, I talked with an election lawyer. And I said you are right, it is possible someone could say I will not use voter data to target ads. And he looked at me and said nobody is going to do that. And I have to defer to the republican party. But I think the expression on his face tells you what you need to know. It is a fundamental tool. And again it is the one thing that separates what I do as a political ad buyer from the folks who are trafficking in the toyota ads. 

>> since I was mentioned in that, yes, voter data is very important , how we target . But consumer data is as you mentioned part of how modern political campaigns target voters still . I think one of the issues we will run into with this. Is potentially how that data is mixed together. So a lot of times it is not just a voting universe of people who have rented a prius. Suggesting people voted early in the primary. Those numbers will be combined together. And segmented out by other factors and the question is how many different segments do you go through, until it is no longer just voter data and consumer data, but a hodgepodge of all different information types, all different data gets put into a system and then used, as information. I can see first party data she mentioned, when we own our own and promotion --information. People that will buy list in different segments and target it , I could also envision ad platforms and sellers of this information . If this is the case and how you would have to report it. Mixing up the data and not reporting it as voter data but as a consumer type data. With voter information, history in their. What the percentage of the use case for me would be the issue. It's not as clean as it sounds. It's not every time. 

I am inferring, some point along the way if you want to target voters you will need this data . Okay. So we start with people who are using voter data, and then we do what . 

The idea here, to segregate out someone who has political intent. And then, I want to associate myself with the remarks made yesterday by cvt. All of us I think agree that what we have in front of us is a series of problems that are not going to be stopped or stymied or resolved by badges and disclosures and disclaimers. And we think someone went into make fun of the arguments, etc. I am totally with that but what IÕm trying to do is say the problem isn't necessarily disclosures and disclaimers, inasmuch as it is with the ways in which information flows on the web . Looking at how information flows and its intent , speaks more to the heart of how the internet functions and how it delivers advertising to people, then a disclosure in a disclaimer that someone said yesterday afternoon that maybe we need to reframe this. Does an internet ad have a face, in other words since it is a dynamic set of codes that goes to someone that sits on a computer screen, what is the face of an internet ad . I thought that was an interesting way to start that conversation. I am not suggesting that I have a solution, IÕm suggesting there are problems in the system that I think are being overlooked because we are looking at, doing what everybody wants to do which is to say it has a screen it must be a tv. It has words so it must be a newspaper in my experience, 20 years in silicon valley, they don't understand the internet, they try to make it something they already know . It's a perfectly understandable way to go about things. When I was first reporting in the valley I did it. We have come a bit past that. I am looking for ways to even the playing field . 

I hear you. I appreciate your innovative approach . Again what IÕm trying to figure out, so we segregate out this group of ad buyers. And do what? We create a database of them? I think it makes , when you say do what, are you talking about , gating rules, or practical applications that might take place. 

What can we do as regulators in order to better inform voters , which I think is the goal. This is about disclaimers and disclosures. What we are trying to do is figure out how to get information to voters about who is behind the ads right. That seems to be a universal issue, shared goal. Doug Hochberg says it's his goal, Christine Bannan says it's their goal . Nobody at least is coming in and saying we want to hide who is behind the ad. They are not telling us that if that is their goal. But I take it at face value. So it's an intriguing idea, we have this group of buyers that are targeting voters because they have at some point acquired voter data in the using that. Now to better inform voters about the ads they are seeing, there is a piece missing. 

>> that's when you say here is with the disclosure rules are. And those rules can be, they can be a badge in the circumstance, I myself favor shorter disclosure because I do business in California and the committee , a group of really great people, the disclaimer that goes on for ever and ever is useless. The shorter a disclaimer is is in order. The problem is, in the current system, it is perfectly possible to place political advertising on the internet with no compliance to rules that have been promulgated at the state level , and no compliance to rules that will be promulgated at the federal level. Even with the disclosures doing air. I see a compliance issue . And I see a situation in which people feel free to create the reaction to that, which is if you are cnn you don't take certain kinds of the ads. Or spot if i. That is my concern. 

>> so, is what you are suggesting then that we take any ad run by one of the segregated categories, put a badge on that . 

Yes . 

And identify 

I am a vendor right . I would do whatever you tell me to do in terms of disclosure. California has a perfectly fine system. We have a badge saying who funded the ad . And you are required through one click. That is not a terribly onerous situation. We ask clients to comply with that. The problem is facebook is set up its own regulatory system that is different. They lack guidance. 

I hear you. Commissioner walter . 

>> part of it is from our perspective we are here to try and figure out how to communicate , basically how to conceive of ways to communicate in the future. What you are telling us I am not sure resonates with what kind of rules we implement in order, our jurisdiction is limited in the effect of providing information on a very limited three or four sentences . So IÕm concerned , not concerned but asking , the conversation to me is interesting from our perspective. How it affects us to 

That maybe, I am not an attorney . IÕm really just trying to grapple with solutions to this problem as I said in my testimony, this may not be a matter for this commission. It may be something I think both cdt and tech freedom , mention the federal trade commission, this may be something that has to be legislated. I don't know. My goal here is simply to make sure the commission understands that as someone who is a vendor , regularly buying and selling political advertising, only political and advocacy advertising , that we have run into situations where I know I can get undisclosed ads up on the wed with letter --little or no friction except for following a few short steps. I am not the only person in politics that knows this but that is my concern. 

This particular case, there is a pre-enforcement step taken. We don't inhibit anybody from doing whatever happens on tv or on the internet. If that's what you are getting at. 

No. 

>> what people decide to do is up to them and the consequences. 

>> so, we react to complaints in a certain disclosure wasn't made , considered an issue at that point. One of my concerns, how do we deal with the very transitory message, or somebody pops up and says vote for fred and you're done. And we have no way of knowing , we have this advertisement vote for fred. And it's gone anyway and perhaps not preserved. I am wondering if we should have a provision or whatever, if the political it has to be an electronic position or save it for a certain period of time. Before enforceability becomes possible. 

I thought your suggestion yesterday about a watch, you were talking about everybody is kinda cool. You said I think it was representing the mondale . He said maybe it could stream through and have a second screen, both for walter mondale for congress or vice president. That's a perfectly acceptable idea . In essence what you are saying, in this case it's probably a piece of html code . But you're saying that hester rendered two images, one is mondale for commissioner, and then number two paid for by whoever. You can embed the disclosure in the code as it streams through is basically what IÕm saying. You can embed the disclaimer in the code that renders the image. That seems to me within the purview . Again not being an attorney , it may well be in the purview of the commission. 

[indiscernible] I think we haven't talked too much about that aspect of how we are going to give the in and out message, and in addition to the case [indiscernible] where is this. 

Excellent. A comment from everybody on that. 

Thank you . I have a couple of questions for Doug Hochberg . Thank you for coming today. Your comment that the RNC has placed hundreds of political ads. One of the largest ad buyers working in politics now, is that correct quick 

Yes. The RNC as well as [indiscernible] pretty much have to be in the past cycle and had half . 

We thank you for coming , because of a specific amount of expertise we are looking for today. Thank you. A couple of quick questions. One mentioned on the bottom of page 4 of your comments, alternative be, I appreciate your comment about bright line rules, no time for ao, I have the same goals did you talk about alternative b, trying to make that more clear, I agree with you it is still confusing. The comment that you talk about was if it does exceed 10 percent , if it doesn't. What we are trying to do with the reference is our colleagues are raising concerns about our proposal. What if someone tries to put a 10 percent disclaimer on their and they want to game the system. Instead of keeping the 10 percent they intentionally try to mess with the system and make it a 12 percent disclaimer. Therefore they would be allowed to go to a truncated alternative disclaimer or indicator . So we put that in there to avoid that. And we think we can fix that but I agree with you, on the other end it's more confusing to implement and you have to get through a lot of different barriers. Tank you for bringing that up. We were trying to make it cleaner but it may have made it less so in the meantime. With respect to the indicators stuff that we have been talking about, on page 4 of the comment , you mentioned your ad choices. The das icon we talked about. You mentioned that, do you think that's the best indicator to put on an ad or do you think the fec should leave it as requiring an indicator let the markets decide what the best indicator is for the ads . 

I would lean towards just requiring an indicator, not specifying which one. I don't think facebook has the edge was disclaimer on their ads. They have a different button that they just rolled out , you click on and it reveals you publish the ad, and the database is now searchable. And there could be another group that comes up that doesn't have that to your ad label if they want to use that. Leaving the options up to the companies that are actually displaying the ads is usually the best way to do that. As I said before , there will be ad types, companies we buy through, social networks that we don't deal with today. And to force some sort of tech onto them, could cause a political speech at that point where a company says you know what, you're add choice disclaimer, that button, I don't like how that looks on our page, we will not do political ads anymore. And a whole market segment could be unavailable to us. Or they could easily say there are certain things that have become too onerous for our group, our website. We don't want to do than. Too much of a headache for us . And we would just say on this type of an ad we are servicing. We will not have a political version because it's too difficult for us to make sure we are compliant with the specific beasts . That is a point that does scare me regularly on those , there will be a popular ad type that is unavailable to us because of a rule that was very specific toward something that I think a broader scope accomplishes the same goal. 

>> you think requiring an indicator would prevent you from buying any kind of bad, at least your knowledge at this point quick 

I don't think if we said any indicator. I don't know of any company. I can't speak to facebook or other ones would put on there. But also leaning towards anyone click away. Most of our ads go to a landing page. Our landing pages have our disclaimers. 

So you have a click through to the landing page. So there's maybe not an indicator but there's already something on there that allows you to get to the full disclaimer. 

Yes. And that is something that is lost. Our goal is to get people to a landing page to sign up for something to find out how to vote. That is our end goal on a lot of those. To the fec rules we do have a full disclaimer on the bottom. That is encouraged as part of the ruling to do that because people will then know when you click through, the ads were meant to be interact. With the page with our full disclaimer. 

Okay. Two of the different panelist yesterday signed onto a proposed rule tics the best or will text the effort --afp mentioned. They support the proposed rule and the added have to go back and listen . I think they said adding smart disclosure to it. I will get back to that but that proposal allows the advertiser to put the name, or an indicator. So if a platform didn't allow you to have an indicator for whatever reason . The option is still there for a name. I think that solves , honestly facebook could change the policy but right now they require the name at the top and a wraparound type of thing. Even if facebook doesn't now have an ability to put a disclaimer within the text or video, it would satisfy that role because you have the name at the top. 

Yes. That is our full point on this, there is going to be, the next 5 to 10 years so many different ways to display who bought an ad. And to allow for the buyers to say as long as I fulfill this requirement somewhere in the ad I am buying, it's just one click away from the user that they can hover over , and indicator on the ad itself, or the purpose of the ad to lead to a landing page and the landing page has the disclaimer of who bought it. Those pieces satisfy to us, the need for supplying sufficient information to any consumer. One last question for you did mostly the press has been asking about the timeline of this rule. Pretty much how . If we were able to come up with something, I don't want to get ahead of ourselves. 

You are optimistic there.

>> don't read this the wrong way. If were able to come up with something in short order, and put out a proposed rule, this summer maybe, oh gc will pass out. If that were possible, would it be something, how burdensome would it be for the rac --rnc , say the rules we are talking about allowing name or indicator . 

I will say depending on the ruling, it could be a lot of trouble for us. 

What if it is the indicator? If it's already worked within platforms and platforms are ready for it. Or if it's a one click away or all of those pieces 

What are you using now quick 

We are using the link right now . A link with a disclaimer, depending on the ad we are running. 

So and indicator, if it could be indicator or a link, if it were that. 

It would probably be fine. 

But let's just assume that we didn't allow for a link . I don't see that happening but let's just say just as you have an indicator you are saying maybe . 

Maybe. I would have to take a look and see how the platforms react to it. I can't , I get worried . 

Not something we want to do is something that messes up people's plans right before an election. I just want to get a sense . 

I will be honest, for the RNC, we have resources and we been figure out things. What worries me is we kind of saw a little bit with the new ad platforms rolled out on facebook thought recently, it is the smaller state committees, state parties , smaller committees that are running federal that would fall under this, at least, running a federal election as , that they may have more trouble than we would. And you'd have to ask some of them on that. We are usually pretty adaptable. It worries me smaller groups, maybe one person with the ad they don't have. They're not paying a vendor, they don't have the expertise I am fortunate to have on my team with people able to handle that kind of stuff. Close to an election day. It would worry me a little bit. Just depending on what the ruling is . 

Thank you. One other quick question. And then i'll turn it over. You have in your comments the one percent click through. And looking at the article it looks like a very small limited sample base, us-based word stream clients, representing 553,000 and aggregate facebook spending . Can you speak to that and it seems like a small study, we haven't had anybody else that gave a one percent number. 

Sure. I just included that to use safe facebook as an example. I have done research and there are two people on the panel that could speak better to it than I can. But looking up google's like the average google display benchmark , across all units and formats. I think it can vary. But it is a very low percentage of the people. I know that is their goal . 

Do you have a comment quick 

Sure. To that point, I have heard that a few times. It is low when you look at the percentage I am sure. To that point, I think when we look at it, I hate to make a comparison to direct my own -- a direct mail piece . It has a disclaimer usually on the back in the last page at the bottom. It is not , you don't fault the mailer for not putting a disclaimer on the front of the direct mail piece. For us it's a similar thing. Online ads for us comment to be click on. And if the end of it is a landing page. That same requirement . You don't have to put a disclaimer on the front of the disc -- direct mail piece. [indiscernible] 

>> and yesterday, I don't think there are any studies that show whether or not people are looking at the ad . If they don't click through it doesn't mean they read it and decided not to put it through. They just scrolled past it. Anyway 

My point with that, I think the paid for by and the name, or the campaign, it's important to have alongside the indicator. There is a least some information that doesn't require you to navigate to a different page. That's where I was going with that. 

Thank you . 

Theodore Peterson . 

Thank you madam chair . A question for each of you. Mr. , Mr. Hochberg . You are familiar with the technology. And you don't have to be in the world of 11 cfr like we are. And one of the issues we have been trying to gain a better understanding on , but maybe you could speak to and the others may want to weigh in. For online users, how comfortable and sappy are they when they are interacting with and add. And I said this is a different medium and static ads we see in television and radio, print media, that when they are looking at something, to get more information, if there's icons they can click on to find out more information about the ad. Who bought it. The information they might be able to glean, because as I stated on several occasions yesterday, we want to comply with the statute, we must comply with the statute. To be included with certain communications. Whether expressed advocacy from the committee and so forth. But we also don't want to discourage innovation. In terms of internet advertising. And we don't want to cut off avenues, especially low-cost avenues for individuals, candidates and committees to communicate through a medium that allows them to reach a larger audience than they would if they had relied exclusively on traditional media. So what is your experience and what is your understanding of how, a typical user would understand what information they can glean from an ad . 

There are two pieces. One are the indicators , we have talked about various types of indicators that appear on ads, as we said facebook or the ad choices disclaimers, indicators popping up. I think that depends on how they look at the ad itself. I would refer to any of those people, how many clicks they get. In general I would give internet users a lot more credit on knowing what is going on on the pages than most. Most of the ads, they end with a click here because as they said the goal is to get people to a landing page . It all depends on what platform the ad is running on. In general I would give people a little bit more credit if they know it is a google banner ad, on a random website they see on a sidebar, that they actually do know they can click that bid if they click that they will arrive at a page that is presumably paid for by the person who ran the ad or the person that ran the ad. And if it's an election ad , they see the disclaimer at the bottom of the page . For us that is kind of the main point, people on the internet are smarter than we give credit for. And for the most part if they see an I in the corner, there is a button there, [indiscernible] 

It has been brought up. My ms.Bannan and others. Click through rates are quite low. And IÕm trying to draw what is the significance of that. Is it because people don't know they can click on more information, or this issue wasn't just exclusive to online media. Television, radio ads, print media . A lot of people when they see you know a campaign commercial for disclaimer,. I don't really care what is being said. The radio may change the station, you mentioned about how many might throw out the mail before they get to the last page where the disclaimer is. And so I am still puzzling over what is significant that we can draw from the fact that many ads are not clicked on . 

The truth of the matter, click through rates are low but so are viewing rates. So is the rate of someone that makes it through an entire ad. If it's more than six seconds long, making it through to a 62nd ad is not I --not that high. But a 32nd ad you can click through, you don't have to wait the whole time till you see the disclaimer that gives the user a little bit more control . They don't have to wait the entire time. For us it's all about user control at that point. They can control their own destiny if they want to pause, a static banner ad for 10 minutes. Dissecting every piece . They can do that if they want to scroll through it in the newsfeed . And basically never see it, they can do that as well. It is really more on the user themselves than anything else on it. I would just point to the fact that even the click through rates are low, the number of people that actually see an ad, no matter how many times you run a variant is low as well. I would like to interject . 

I would like to ask, obviously yes silicon valley, add buying, what is your perspective. 

Two things. Political is unusual in that the soul metric that is generally used as a click through read to measure add efficiency effectiveness. Other advertisers have a range of data points they are happy to trot out for you, which mean nothing unless someone has gone to the website to look at it. Political is unique in that. Most of our clients are heavily interested in click through rates. As Mr. Hochberg said, that's how we collect information and get funding etc. . So the point, as a company, our floor is a .1 percent which is lower than google's overall. I think the .5 reference includes video and some other types of advertising. We worked very hard to up click through rates through optimization. IÕm sure you guys do it as well . What that means is we are constantly looking at dashboards that tell us how people are interacting with advertising. We are constantly looking to up the click through rates. We are starting to see mobile click through rates at one and two percent, that , we are past excited. And so those sorts of metrics are there. The other thing I would say, most people are interacting with internet on a commercial basis for shopping or whatever these days I think by now most people know if they see a pretty pair of shoes they can click in their shoes are at the door and tomorrow. . I wanted to interject on the conversation earlier . There is a danger here that an indicator is going to be used by certain publish rates to turn away political advertising. It would be the first clear marketing that would occur on the ad platforms. Assuming, in other words political advertising is not in any way distinguished from anything else, no icon or badge. If you put an icon or badge on those ads as they run through google, I don't click manager , trade desk , etc. There is a chance those ads will be turned down when they reach publishers . I think that chance, and Mr. Hochberg is right to be concerned, there is a very good chance that some publishers will say political, not interested. That effect will be people now have to go more directly to publishers. Again, that gets you into the concerns about gardens and people setting rules. 

>> yes. Go ahead . 

I wanted to say , I agree it is true with traditional media people are not going to see the disclaimers. I think the difference is that when you're watching a tv ad, if the user if you're viewer doesn't do anything , the default is for them to see the ad did they take the opportunity to turn it off or change the channel. Where if you need to click, it's like the reverse. Needed to actually see the disclaimer . 

>> that goes to the question, is advertising , video advertising for example on the internet the same thing? Should we deal with it in the same lens. Because of the interactive ability. And so , that is one of the questions we puzzle through. One quick question, during the opening remarks , you mentioned there were certain elements of the proposals that might discourage innovation. Could you flush out what your concerns were. 

My concern , it was with the exception an alternative fee the best feed that allows some advertisers to not use an indicator or the full disclaimer. 

Like small items . 

I was referring to the small part. And I think with the iab yesterday, I think now, people seem to be coming to an agreement there should be will some way to get to a disclaimer. So it was just, to the narrow part of alternative feed , allowing some small ads not to do any form of indicator . 

Just to clarify the small items, the alternative is a new exception. 

So just because I think you're not is in the weeds on this stuff as we are. I just wanted to make sure the record was clear on what we were talking about. 

And finally I just want to come briefly mention, I somewhat understand the concern that is expressed by ms.Bannan and Chris  Nolan  . Why they are targeted, what demographic characteristics, parties are finding interesting about them. Why they are targeted for particular ads. I think that raises issues that are much longer than politics. But in general about how information is collected about us . What implication it has for personal privacy and so forth and that's am thinking about it, off the top of my head , the concern I have IÕm not sure what statutory work we would have the collect that information. Our losses ads have to contain information about who paid for it and whether it was or was not advertised by a federal candidate. Requiring these ad buyers to also disclose the demographic information underlying those decisions . I don't see how we could do that statutorily. And also a potential , even pre- association issue that can arise from that. For example, when we conduct enforcement investigations and campaigns for partners and so forth, we can't disclose the file at the end of that disclosing what the strategic goals and research of that committee were . For the agency to be primed and demanding that we receive strategic information from parties and candidates , I could see that that could start running into issues for the association even though I understand the concern. Of citizens about how their information , information about their buying habits, how they vote and so on, are being used by candidates, parties and so forth to target them. I just point that out as a potential issue. But you look like you want to respond 

I agree. One of the things I have found interesting about this, the entire debate about political add disclosures and what happened in the 2016 election, is it serving this constant the buescher concert and -- concentration , where you have people doing targeting of consumers for good reasons, and then losing the data and having it spread beyond , that people are starting to get concerned about. From my way of thinking, a lot of what we are discussing his problems and how people are approached on the internet for commercial purposes. We are using political language because it is the thing most sensitive to us. Whether I buy is peer shoes is not a concern to society, but whether my vote is influenced certainly is. So we are having the same set of conversations, just using different language. I do think that there seems to be an interest in some sort of statutory, legislative solution. What that is is well above my pay grade. 

Thank you. 

>> vice chair. 

>> thank you. I will go back to a question we were trying to get yesterday . Still don't have a good answer. It's kind of keith what we are doing. There was a general consensus that if it is feasible, we do find that with the full disclaimer on the ad. And at some point , from yesterday. Both proposals start from the premise if you can get the full disclaimer on the ad, that is the first thing one would do. And then it's only at some point, that is the key question, what the point is. At some point it is not feasible. IÕm using the word feasible which is not a proposal, just a proxy, there is some point along the way where it doesn't seem to make sense if it's not practical not feasible, we can't fit it, whatever metric we use it at some point we would go to an adaptive disclaimer. There seem to be general consensus it was appropriate to do that under some circumstances. A little bit of discrepancy on some people like ms.Bannan said, it's important to get the name at least on the face of the ad of the sponsor . And the rest of the information could be in a one click place. Other people said just put an indicator on it and people will click through . But the question of what is the trigger going from the full disclaimer to some lesser amount of information. And then the availability of it again. At a one step removed. That is kind of a question I think we have been trying to grapple with. What is that trigger point. So I would welcome any advice. I realize it goes in a slightly different direction from what miss  Nolan 's suggestion the best suggesting. It is a decision we will have to come to at some point did any advice you can give us on what kind of metric would be appropriate to use for that decision point. 

I will start. I understand this is probably the hardest question to answer on. Anything we say is fairly arbitrary. That is why we are advocating for the one click away. Because of this fact. Whether it's 10 percent , I heard someone mention 40 percent which scares me. But, it is going to be an arbitrary number whatever it is. And the difference between nine percent and 11 percent is nothing. On and add . That is the difficulty we run into. That's why being able to fall back on having a one click away, that is why I will harp on that forever. It gives us that clear bright line of we know no matter what what add rerun , no matter what platform it is on, no matter what indicator is the preferred method , that we will be held to be compliant with the fec. And I can turn to the legal team and say we are good , that we feel safe running these ads. And that consumers will know who ran the ad. That for me is the biggest piece. Knowing beforehand. 

>> if all of your disclaimers are one click away, fewer viewers are going to get to the one click point and c .1. Than if it were on the face of the ad or some version. RNC is really short . It's hard to imagine there are not a lot of places to fit three letters. Another point I think that is important to note, you seem to have a different notion of what the one click rule means. When we say one click we mean one click and there's a disclaimer that not one click and you get to more, depending on who you're talking to, persuasive information propaganda from the advertiser , that you have to scroll through in order to find a disclaimer somewhere at the end. Whatever amount of information. There seems to be a discrepancy on even what one click means. Miss mannan did you want to weigh in quick 

I will just say, -- ms.Bannan . 

>> I was say it's difficult to draw the line . I think everyone is calling for technology neutral standards . So you are not in this position again in a few years. I think everyone wants to avoid that. 

>> a few years in a lifetime of technology, who knows. 

Right. Our position is that having the paid for by are in c indicator is the best, it's like the best option. I think the extra information alongside the indicator is the best compromise. And to get the full disclaimer you can click. We can maybe have an argument about what one click away means. I think at a minimum there needs to be some text on the face of the ad, or in the wraparound box on the social media. 

Could I respond. I agree with you that when we started yesterday that was a threshold question. How we figure out how to get from the full disclaimer or adaptive disclaimer to an indicator and what is the standard . I agree that's where I started yesterday. I think we have a different take that to me after yesterday, I didn't think anybody had any good proposals for a trigger standard . That we had yesterday. Somebody said it's not impossible. Nothing jumped out to me that here is the solution that you and I were unable to find. We worked on this quite a lot with the general counsel. The proposals we put out took a lot of time and attention from those of us who are familiar with the issues. We didn't just throw out the first thing we thought of. Those trigger mechanisms didn't work for a lot of the commoners on both sides . As I say I don't think we heard anything yesterday that solves the puzzle. Because of that it seemed to me people are moving in the direction of at least considering having just an indicator on the face of the ad, with the full disclaimer available at the landing page. That's what I took out of it.. 

Some people came in with that perspective, such as Mr. Hochberg . IÕm not sure anybody yesterday said oh , I was thinking it would be better to have the full disclaimer but you are right as long as you have an indicator . 

I think I have to go back to my notes but there were a couple of panelists that came in . You have to have the full disclaimer no matter what. It seemed to me they were a little bit more as the day went on. More receptive to the notion that maybe you could have an abbreviation of the name, or shorten the name. I agree with you but not everybody said go to the disclaimer and you will be fine. Sorry, just go with the indicator and you will be fine. I do think it's moving away from the rigidity of having the full disclaimer on the face of the ad did I do think there were a number of panelists who seem to move in that direction, a couple who specifically endorsed it in their comments. After seeing two different proposals. I do think the question about the one click you asked about the landing page. I thought about this a lot and I think, yes there are a few bad actors in a couple of people mention them yesterday, where if you link it goes to some crazy webpage but putting that aside, it's a pretty small percentage of bad actors. If you click on the RNC link you will go you think to the RNC homepage. They're not hiding who they are . 

IÕm not worried about the RNC . 

With these other political committees, they tell you upfront who they are, which candidates they are supporting, what the issues are. Where as if you link to some box that says paid for by the RNC, and here is our website. I do think we heard this from from some people yesterday, that disclaimer in and of itself doesn't give that much information. Mom-and-pop apple pie as someone said yesterday the street address, it doesn't do it for me. 

Will that is what the statute requires. I think if mom-and-pop apple pie in fact are appropriately filing their reports, then somebody that's really curious will find out who their donors are and get a sense of who is behind the organization. But that, we are dealing with the statutory framework we have which require certain language on the disclaimer. In the issue that was raised, is it really one click. Nobody's confused about who the RNC is. That is not a big problem. I don't think you're trying to hide who you are. But there are two separate issues. Which actors that are already in the, actually trying to hide who they are. And the ease in accessing the information. If you get to it in one click, does that mean there is the information the statute requires. Or one click and now you can start hunting for the information the statute requires. I just wanted the surface there are two different ideas about what that means. 

Thank you for that name being so high . Concerns on our ads. To that point it was mentioned there would be no problem . There's a place to put paid for by the RNC . Some people know what that means. There's a lot of other groups that have acronyms that you would love to put on and add that shows no trace of who they are. I don't think it provides any extra step for consumers, any extra guide that would be more confusing than just allowing for a one click away. Because somebody's acronym may have no association to who they are. But if you click on the indicator or go to the website you see at least the disclaimer with the full registered name. 

>> let me ask you ms.  Nolan  , you are from California . 

I am actually from here. 

>> IÕm glad you're from here. This is a great place. 

>> eastern shore . 

The great state of Maryland. 

One question I asked yesterday the person I asked had no information really . Under the California system. It's my understanding there are particular , maybe with sms technology , certain kinds of ads where you put the id number of the committee. And then people can go to the fair political practices commission . For that committee id number and find out all sorts of information . But the id number itself is not terribly informative to somebody that doesn't go to the trouble of doing that. So I wanted to see what your reaction is to that kind of system it in terms of whether it's effective in getting useful information. 

As vendors our concern first is that the ads are displayed in a way that helps protect our clients. So the fp pc has a couple of different rules. IÕm not familiar with the exact one you are referencing. I can tell you what they have historically asked us to do is make sure the words paid for by appear on every add. It is a legacy brought over for the rules for direct mail. We have not found their process to be terribly onerous. What we do have problems with is paid for by , along disclaimer including primary funder, that go on at great length. We joke and say the really good people doing really great things for really great reasons paid for many people with lots of money . The fp pc has in fact required us to put numbers on stuff our mail. Right now what we do in California is we have a banner on who funded the ad did using the word funded is interesting because you don't really ask if amazon funded the ad that says amazon. Etc. I think who funded the ad is in many ways a trigger to say it's political. That said, again were vendors in our concern is about the efficacy of the advertising, not necessarily about the disclosure and can slain -- disclaimer required. 

I want to circle back to the web developers. Most of those, 

Actually it isn't . One of my board members likes to joke we are the only ad for tech firm in the country that never takes money from outside the us. It is true. The mischievous actors, the voter part was much of the outrageous activities that took lace in 2016. The use of voter files was a part of that. I would suggest people who are concerned that bad guys won't put disclaimers on ads, take a step back and look at it from that lens. And say if you are a bad guy and you're using data, perhaps we can get you is your coming in the door as opposed to after the horses . 

I appreciate that one. I want to circle back and confirm , put in! . As somebody who's gotten a lot of experience in the field you don't find it onerous to have a requirement that says paid for by, with some version of the name. 

I do not. And honestly that's a requirement [indiscernible] most people unfamiliar with federal or state law will ask us to include in ads. We do business mostly on a direct basis. We often have to go through standards of practice, like new york times, washington post, los angeles times. Our concern and absence of guidance , these guys make up rules and are trying to outpace facebook . One of the minimal requirements is paid for by . We can generally default to paid for by. We have also used mouse over or hovers , for lengthy disclaimers. We would hate to see that option go away. It is one we find useful. 

If everybody has another couple of minutes, I have a question . 

Ms.Bannan , you said it's a lot more stronger, because of the micro-targeting. How does that affect us? 

Sure. 

>> addressing the micro- targeting [indiscernible]. One article I was interested in, I hovered , it keeps coming back to me now. You said why would micro- targeting help us . Does it make any difference to us whether that message is sent to fred, george , or somebody that doesn't like something else it 

So the reason I emphasize that, is the rationale for having these disclaimers in my mind is a lot stronger because of the micro-targeting to know who paid for it. And because you know if you are seeing an ad online it was targeted at you for some demographic , some information about you. And to know who paid for it is even more important than if you just turned on a tv and everyone in your area is seeing that . Just the rationale for having a disclaimer I think is stronger than it even is for traditional media. 

And it doesn't affect our decision. 

Right. Another thing, it's just that when there is an indicator , and the landing page. This may fall outside of the statutory hook. But that same mechanism is also the place where you get the full disclaimer and you also get that demographic information. And that is similar to the ad choices. System. 

Thank you

Thank you very much to all three of you and once again we could keep talking for a while , this is incredibly helpful and we will start the next panel at 11:05 am. Thank you very much. 






Thank you for being here for our fifth and final panel. It does feel like afternoon. Good morning. On this panel we have Theodore Peterson . We have Thomas Reiker deputy digital director of National Republican Senate Committee and we have Carmen Scurato on National Hispanic Media Coalition also on Asian Americans Advancing Justice and Color of Change. Thank you. As you heard. Each witness is permitted to get a five minute opening statement and the yellow light will come on when you have one minute left in the red light will come on when it is time to wrap up your comments, we will go alphabetically so we will start off with Mr. Peterson. 

Thank you for the opportunity to participate in this hearing. Each of us serves in the digital departments of our respective national party committees and have devoted time and resources to digital communications. We are happy to offer the statement jointly today. The issues raised in the rulemaking are issues we have seen firsthand. Our two committees lawyers have submitted written comments and told you what they think the law requires and allows. We are here to address some of the more practical considerations before you and we want to emphasize how important it is that you pay as much attention to the practical issues as you do to the legal issues. For practical reasons both committees believe strongly that the overriding consideration for any internet disclaimer role has to be flexibility. Flexibility encourages compliance and shores we can continue speaking as we see fit. 

To this and we want to emphasize three points. First the proposals in the rulemaking our efforts to apply old law to new technology. As you know technologies evolve at the speed of light and true in digital communication. The rules and statutes are from the early 2000's and they were written with tv and radio ads in mind. The internet rule from 2006 was written with graphic website advertisements in mind. The proposals under consideration now are responses to social media and applications used on handheld devices and tablets. Facebook is not the last digital platform you will see, and iphones are not the last devices connected to the internet. Any the rule it will become obsolete soon or later and the only way to avoid repeating this exercise in a few years is --the secretary should not adopt new rules as to uncertainty as if they offer improvements over the existing rule. The rule has been and continues to be applied flexibly our committees have never been under the impression that nude digital advertising is exempt and if we can't put the disclaimer on the face of the ad we use the click through approach and we are not aware of committees out there that have a different view and among regularly reporting committees there is not a disclaimer problem. And there is some proposed requirements that would render certain advertisement formats obsolete if the practical effect of the disclaimer requirement is to kill off the type of messaging it is bad policy. It is one thing of congress mandates this but another thing for the commission to choose other options exist. One example is the proposal to expand the stand by your ad requirements to online videos. This requirement is not compatible with the six second online bumper at which is proven to be an effective way to capture people's attention and drive efficiency. If we have to devote four seconds to the disclaimer message, we simply won't run 6 2nd avenue. And this is one example and we raise it with the hope the commission will pay attention to how these rules will apply in the rule world outside the book of regulations. Thank you. 

>> today online communications provide valuable opportunities to engage in the electoral process and allow disenfranchised voices to be heard in innovative and powerful ways. Technology has evolved exponentially since 2006 and online platforms have sophisticated methods of tracking users. Advertisers are provided information to target specific audiences through detailed profiles of their preferences and habits and it exploits week nicholas and biases. When used for political advertising these technologies pose a threat to our democracy because of these tactics voters are susceptible to deceptive campaign practices that attempt to spread confusion discourage voters or disseminate false information. Effective disclosures can alleviate these . The 2016 election exposed social media as the wild west of online communications were some advertisers targeted online communications to inflame racial hatred and divide the voting public. That is why the commissions proceeding to eliminate loopholes left from the 2006 era political advertising roles could not be more critical and more urgent for communities of color. Without disclosure requirements that bring transparency to all online political communications, campaigns will continue to exploit the use of color to voter suppression tactics. People of color are particularly harmed by the lack of comprehensive and effective online disclosures because they are more likely to depend on smart phones to access information about elections and political campaigns. Appear -- research study found hispanics and african-americans are 155% and 67% respectively more likely to depend entirely on a smart phone to access the internet than white individuals. Southeast asian and pacific islander americans have some of the highest rates of poverty and racial and ethnic groups and even lower levels of broadband adoption. But asian-americans were connected leave the population and the use of the internet mobile digital devices and social media. 91% of english-speaking asian- americans on a smart phone compared to 66% of white individuals. But they don't require that every political ad individual see on the smart phones have a disclosure. Inadequate disclosures fuel misinformation campaigns and contribute to voter suppression tactics targeted of people of color. That is why it is critical the commission move forward to provide clear rules for online political ad disclosures or risk further disenfranchising otherwise marginalized communities. One place to start is the definition of public communication. As the commission suggested, definition should be revised. We agree. But the rules will be ineffective if they are not ready to capture the dynamic online space. That is why we propose additional language so the final rule reads communications plans or promoted for a fee on another website or internet able device, application, or services. The promoted for fee language would capture influencers who are paid to share content created by others were no payments are made to the platforms. Or services, language, would apply to the entire online ecosystem, for example, netflix or online video games may be better understood as online services then a website or application. As for the alternatives we generally support alternative letter a and support the creation of an adopted disclosure exception but the commission must make clear that the political advertisers can only use the adapter disclosure when complete disclosure on the face of the ad is simply not possible. And adapter disclosure will only be effective if it is in a uniform indicator with a message that clearly signals that it can be used to access the full disclosure. The full disclosure should not be accessible and no more than one step and it should include --not include any other information than the disclosure itself. For the indicator we suggest paid political ad but we encourage the commission to select and support an indicator that meets the same standard of effectiveness is the ad itself. And indicator would not be effective if it were just a website url. Additionally, the commission should extend the clear and conspicuous requirements to online disclosures and rules for printed media require reasonable degrees of contrast and sufficient size to be readable. The commission should also clarify that for a disclosure to be clear and conspicuous it has to be in the same language as the ad. As stated earlier, people of color are clear targets of deceptive practices that attempt to spread this -- confusion discourage voters. This is about having an informed electorate in the digital age and ensuring predatory ads and not what denies for division and hate in our society further disenfranchising already marginalized communities. It is about securing the integrity of our electoral process and protecting our democracy. Thank you for the opportunity to be here today and I look forward to your questions. 

Thank you. Any questions. I will start with commissioner Peterson. 

>> up to this point is what can we expect an online viewer of ads to be savvy about in terms of when they are interacting with online ads? I think across the board and the vice chair brought this up in the last channel we agree there is at a minimum some point where their online ad formats that just can't accommodate the traditional disclaimers that we see on radio television or mail or newspaper ads. And when we reach that point and we have struggled to find a trigger where we go from the full to more of a truncated and adapted disclaimer or an indicator but I think there is general agreement that at some point there are some ads in formats that are valuable to committees and candidates and individuals to be able to reach audiences at low cost that we don't want to discourage that would require an indicator. And so what can we expect of the average --how familiar, and from we are experience -- your experience, are users interactive with ads and understanding the maybe click through capabilities and icons that can inform them about additional information. Because if it is the case that viewers are relatively knowledgeable but they can get the information that is required in the statute through a simple hover or rollover or click through, click on an icon, then that would allow the best of both worlds, were the actual content of the speech is not impeded by or overwhelmed by the disclaimer and the disclaimer does not get cluttered up by the speech and that each element that is necessary for effective communication is there. So I will start with Mr. Peterson and ask each of you if you can respond to help educate us on this particular concern. 

Absolutely. I think it is a common understanding that regardless of if it is political or an ad for merchandise or whatever, a click of that ad will lead to more information. A click will lead to a website which will lead to more information. You have heard a lot about the indicator from previous panels. I think my biggest issue and something to consider about this indicator is can it be platform agnostic or screen agnostic. We are talking about we heard a lot about facebook and google and twitter but not a lot about snapchat or low --blue or others and I can go on and on there are so many different formats and platforms and ways that people are connecting to the internet. Can that indicator be agnostic to all of these different types of formats. . 

Your question implicates the need for flexibility and approach to this problem. The real answer is our ability to serve a full disclaimer versus and adapted disclaimer versus whatever indicator you may be considering is dependent upon the platform itself and not only the platform but the ad type. So I think there is almost a limitless number. The only limit to the different types of ads that can be served on the internet is the limit to silicon valley's innovation. So I don't feel that I can predict all the different units that will be available in the next five or 10 years, and I don't think that is something that can be codified in the regulations of the has to be flexibility to speak to the fact there are new ways the people are interacting with the internet. I will also say that I know for both of our committees, we disclaim on any advertisement we run on the internet that everything goes through legal approval. We do our absolute best to incorporate a full disclaimer where we can and if it needs to be adapted we do our best to make sure it is us that are speaking. It is not an issue in our sphere and we disclaim on any at we run and if we can't get to a place with both our legal counsel and the ad network where we are able to serve a meaningful disclaimer, then we won't run that ad. I have struggled to force a situation in which somebody receiving one of our ads would not know that we are the speaker because we go out of our way to disclaim. 

I do agree that we need flexibility, but I think for me that is when we talk about the platform itself and the new types of digital media that will be available in the future. We just can't potentially see what that would be. That is why we really think that that services language is necessary to capture that. For example, a service could be a video game. Or what you are talking about, xbox or netflix or other ways or means that people are receiving these ads. That is why it is important to include that language. I also think that you mentioned that the click over or the hover over feature. I want to emphasize that we have to think of a solution that is also available on mobile devices especially when we are talking about people of color who over indexed on mobile. You don't have the rollover or hover feature on a smart phone. I think that would then preclude that disclosure from ever popping up if you're looking at it. I think that is an important thing we need to consider. One of the things we also did in our comments as we actually proposed some language that may capture these new technologies. We think it should read a digital public communication with text or graphic and this is when we are talking about the adapted disclosure. But without any video or audio components that due to the character and space intrinsic to the technological medium can't include the required disclaimer. We think that again captures that forward-looking approach that is needed to understand that this is important across all platforms. 

You brought up in the discussion on public communications that you would like the definition to include advertisements that are placed or promoted for a fee. I don't know when it happened, but at some point in the last two years I have gone from being I thought a relatively with it and in the mainstream to be over the hill, as my kids constantly remind me. So I am aware of tweets and posts and so forth and I see them on a timeline or on a facebook feed, but I am not at all knowledgeable about how that process takes place. You would mention and I assume that there is a payment that would have been made to twitter or facebook and I understand that it can be as inexpensive as a dollar and you can do it for $20 or however much. Walk me through little more about how the promotion process takes place so I can better understand how that would even work in terms of the disclaimer requirement. 

With this promoter for fee language, we try to capture that when individuals are being paid to promote content. You are talking about influencers and other agents. We thought this was important because if you don't have this language and somebody is being again paid to promote content, you're just having a surrogate, right? 

How does one recruit an army of influencers and make a payment for them to promote a particular post or particular news article or what have you? 

I will be honest. I am not familiar with that process . 

Not to put you on the spot. But it has come up a few times and IÕm trying to get a little bit more understanding. 

It is important to look at the federal trade commission's guidance on this because they require that bloggers and reviewers and influencers would get compensated to promote a specific product and actually disclose they were paid to do that. That is very important because people to rely on these individuals and they do trust them and it needs to be clear when they are being paid to show that product. It also can be for example I could say I really like this coach bag but if I am being paid by them to say that, it is a very different understanding, especially when you are viewing it as a consumer. 

Okay. Finally, and I will start with you ms. Scurato, you mentioned in your opening statement that you would want any indicator to be uniform across platforms. And I guess one of the questions would be, because I think I have some concerns and others have been raised by some panels that we should put the requirement for an indicator or signifier or an icon of some sort but not be overly prescriptive about what that looks like or says to allow innovations and allow for some flexibility for that process to develop, but I just wanted to give you a chance to explain further why you think that should be uniform rather than allow there to be a few different modes by which an indicator can be provided depending on the platform. 

In our comments we actually said we support paid political ads as the indicator. But I know throughout this hearing, there has been variations of that but I think paid is a very important part of that. I think the reason we want something that is clear and straightforward and consistent is that helps inform the electorate. If we have variations on the same thing , and you're talking earlier about the need of an individual to understand can they click on this and what information they will get and I think having something again that is consistent across platforms, whatever that indicator may be is very important for that process. 

>> do either of you have anything to add on the issue of educating us on promoted 12 -- poster tweets or the issue of indicators or the uniformity or need for some flexibility in that realm? 

I would reiterate that on the actual advertising itself we disclaim on any advertisement that we run on the internet and some potentially foreseeable instances in which that was not possible on that advertisement, maybe we would rely on click through which I think is a decent disclaimer and speaks to the mobile experience as well, we disclaim on every ad this to be additional disclaimer for us and I would also -- I would note that it is one thing to talk about language that is uniform across all platforms but to talk about some other form of marketing that is uniform across all platforms is not technologically feasible. 

I will start with commenting on the influencer disclaimer. It is not something that I am familiar with but I would say that any time there is a new ad format and any time we have a new way of trying to communicate to others, there is a rigorous process of both of our committees where we go through our legal department and they are making sure we are complying with the fcc rules. And that would be the case for this influencer situation. I am not sure how this transition transaction works but we are going through a rigorous process to make sure we are following the rules. Secondly, on the indicator, ms. Scurato mentioned the mobile device and I think this indicator is --i think the way you're thinking about it it is a hover over or something you click on but on a mobile device, that is not the same user experience as on a computer and we have people in smart tvs or roku or apple tv who are seeing these ads and again those are not situations where you can necessarily hover over and I am not sure you are familiar with ways to access the smart tv councils or apple tv. It's like a clicker. You are not able to hover over that. So the point I make is it needs to be flexible for these different types of ways that people are accessing the internet. 

That is all I have for right now. 

Can I address one thing real quick. You said it is not technologically feasible to have something and I think that is something the platforms are more equipped to really speak to at this point because the way that I understand it, especially when it comes to these platforms. And again the language we proposed about the disclaimer being intrinsic to the technological platform would not compel these companies to require that but it would incentivize them to create some technological mechanisms in order to accommodate political ads. 

Do you have any questions? 

I got the impression though that the gentleman from before, he indicated that there were click through's to be used. 

The gentleman who is here from the RNC mentioned that if he didn't put the full disclaimer he had the link to click through to the RNC webpages that what you mean? 

Right. And then for my conversation today I got the impression that they were using them. 

>> again, anytime --the point I was making about the apple tv not being able to hover over and the point I make is that we need to be flexible on how this is implemented because there are so many different types of ways people are accessing the internet. If it becomes something that is eliminating our ability to use the other types of advertising platforms, then in my mind, it is limiting our ability to get our message out. Over-the-top advertising is a new type of digital advertising where there is ad inventory available through an apple tv app or an xbox app or roku app and these are ads that could be playing on television or playing on a smaller screen. But these are the types of technological advances that in my mind requires the disclaimer role to be flexible for us to comply as best as possible with the rules. 

So how would it work? Anybody that clicks on, let's say a handheld [indiscernible] message so you are saying to click through your computer you can do that on another page and is that the idea and it would be one page that says --first of all let's clarify. Do we do that at all? Because I get the impression that the only thing you did was --  

>> almost every form of online advertising is clickable to some sort of landing page and that is the nature of online advertising is to incentivize interaction with the viewer. But we disclaim on the actual front facing add on any advertising we run and on platforms where that needs to be truncated in any way we work with a platform and her legal counsel make sure it is clear that we are the one speaking. 

So you modify the language but you don't have a click through? 

It would be both. Anything we do have the disclaimer and most things we do are likely clickable through to a website that also has our referral --full disclaimer. 

That would be an add-on but do you have anywhere that you can add and you have a little message or icon or something to click and you get the information about who paid for it? 

Typically for us it would click to a landing page but to a standalone webpage that has our disclaimer on it in addition to whatever other information. But the actual front facing add would have our disclaimer and then I believe what you're talking about is clicking some sort of icon or in prompter and then having a pop-up that says this ad was paid for by whoever. Facebook and google are currently working through a technological level what they wanted to look like but that is a thing the networks are tackling right now. 

As I understand it, in every case you have, when you see the message, you also have the full text of your required language or modification of it but you don't provide that somewhere else? [indiscernible] 

Also if you click the edit would be on that page. I can't think of a time in my time at the committee when we have ever run any online advertising that didn't on its fund the front facing have a disclaimer. 

We had a discussion with the gentleman -- 

I think when he says disclaimer he doesn't mean the full disclaimer. That is why I think there is a confusion. 

>> go ahead. 

I am sorry. I was trying to clarify, when Mr. Reiker said we disclaim on every ad, I want to make sure that you are not saying you put the full disclaimer on every ad. I think you are saying that you do to the extent you can, if you can't get the full disclaimer you may have a shortened version of it. I think you said you always link to your homepage. 

Correct. As far as linking, that is the nature of online ads. The networks incentivize you to have an ad pulled through to a page because it is an interactive experience so that is a thing we do to disclaim but also because we do it because it is an online best practice and if we do an ad it should be clickable to a website where you can take further action to engage in the political process. 

Do have instances where you have just your website and click on it and obviously your website would probably have RNC in it but do you have that link we can get to your homepage? 

I can't think of an example of the top of my mind we don't have additional disclaimer language. I can't think of an example where we just have our website. 

Madam vice chair? 

>> in the ads you are currently running, when someone views them on mobile devices, do you have ads or you can see the full disclaimer on the mobile device? 

We do, yes. 

Okay. That is good. That plainly means it is possible to do that because you are doing it. 

With respect, it is so specific to the actual advertising experience itself. So not every mobile ad is the same. Just because there are some ads sized large enough that you could legibly and without interfering with the ad experience survey full disclaimer, it doesn't mean that something is 120 pixels by 120 pixels and has a banner ad at the top is the same viewing experience. That said, we still work with the networks and legal counsel on those out to make sure there is still a disclaimer and it would almost always, and I can't think of an instance in which it would also be click through to a website with our full disclaimer. 

I want to make sure I got this right. On the ads you are currently running, when people look at them on their mobile phones, some of them they get a full disclaimer when they are looking at it. And some of them, there is some information and you click through to the full disclaimer on a landing page. Is that an accurate depiction? 

Yes. I believe so. 

I want to make sure I get that straight. I should have said at the beginning, thank you again for coming. We appreciate your technical expertise and ms. Scurato, I particularly appreciate your being there because you are providing a perspective that none of the others are and I think it is one that is important for us to be aware of , how what we are doing affects voters at large but also voters in different populations. And your written comment was really very helpful to me in trying to sort through some of those issues. How important --you have indicated preference for alternative a and you think a full disclaimer should be there unless it is really impossible to have it on the face of the ad. How important do you think it is, particularly for the people who are going to be viewing the ad on the mobile device and let me just say I do everything almost on my mobile device. I do have laptops but, I don't know, I always end up looking at things on my phone. How important do you think it is to have the full disclaimer with all the legal requirements versus having paid for by the name of the sponsor and then a click through or some other way of eating to the full legal language? 

I think that depends again on the medium, even on the cell phone because there are different platforms and applications and you view them very differently. Some people even have bigger smartphones or iphones and smaller ones. 

I think again it depends on --i think we would lean on having the full disclosure whenever possible unless, again, that medium does not provide enough space or enough characters for that disclosure. That is why we really think that is the most important thing to have the informed electorate and especially when you're talking about, and I know this was brought up, I believe yesterday, about having ads travel across the internet ecosystem. And when you have ads travel across the internet, having a disclosure on its space is important versus that click through feature or that adaptive disclosure. And when you talk about the promoted, capturing, payment for promoting it, I mean right now, when I look at ads, I will sometimes see in my twitter feed for example where promoted is there in the corner of the ad and are you thinking about something like that or are you thinking about promoted by this person or paid promotion? Can you spell out how you envision this would look? This would be for payments not made directly to the platforms. 

It is payments made to individuals to promote that particular content, so I believe the disclosure would have to say paid for and very similar to what you would have on any other political at online. 

I am running out of questions. That is hard to believe. 

I think this is one of the key questions I am working on know many of our witnesses and I do want to categorize and I think many of our witnesses have expressed preference for having the full disclaimer information . But most of them have also acknowledged there would be some circumstances that would not be possible and at that point we would have to have some kind of active disclaimer to have the information to voters. One of the key questions that we have been trying to grapple with over the last few days is what is the trigger point and at what point do we say okay, if I am looking at the at at my screen and the entire screen is now filled up with disclaimers, is that too much or is that the point we have to say and adaptive disclaimer would've worked better in that circumstance, but at what point do we move to the adaptive disclaimer and move off of the full disclaimer? What you think the optimal move for that would be? 

Again, I think it depends on the platform. That is why we wanted to include that language that it has to be intrinsic to the tech logical medium being used. But I do want to emphasize that I believe a percentage trigger is not the right solution, only because I think it would lead to some absurd results when we talk about a candidates name for example. If I use my full legal name, maybe that allows me to have an adaptive disclosure. But john doe, as another example, he would not. So I think we have to consider that. Also, just changes in language, I think the example we use in our comments, paid by color of change, that may not require an adaptive disclosure but if we save paid for --said paid for depending on the medium that may trigger that so I think we really just have to consider where are these ads being placed, and go backwards from there and that allows for that flexibility when we are talking about the advances of technology that we will see in the future. 

I think that is a concern that some people, they may come up with in the committee just so they can avoid ever having to do the full disclaimer or they might choose other typeface to fill up more than 10%. I think the difficulty using percentage-based calculation and the problems with why you have one answer for 9% and one for 11% even if you could figure it all out that way, have been pointed out but again, if we are not going to use a percentage base, then what are we going to use? I think we need some kind of a metric for that. I would be open to any suggestions. 

I would add that we don't think there is a problem. We are putting disclaimers on everything we do put out on the internet for a fee and any burdens of new requirements are going to be --will fall on those of us that are following the rules. The bad actors, if they are out there, they are still not following the rules. We are the ones affected by this and we are the ones already following the rules and we don't believe there is a problem. 

That leads to something I wanted to ask. Thank you for reminding us that there are current rules right now and a lot of people seem to think there are not and I think that is something that ms. Scurato said in the opening statement. I think you said there are not rules now in the interact dish internet. But I got that impression from what you said. 

That is not what I meant. I meant that they don't cover all forms of ads across the internet ecosystem. 

I think they do. I think we have a disclaimer requirement for all internet ads, and that is in our regulations and we had a recent ao that reiterated that and we did have an ale promulgated a few years ago, google ao which provides for an ability to use a link, and we talked about that a few different times today. I don't think that our current rules have anything to do with which platform you are using, and your suggestion that it depends on which platform with respect to what disclaimer and what standard we would use, a lot of other panelists have said that is not workable for them because they often create an ad and they don't created for a specific platform. They create something they want to place in a lot of different areas and the notion they will have to create something and run through the traps of 10 different platforms and rules is not workable for them. So I wanted to let you know that is something that we did here. There are rules and it is good to know that you guys are following them. One of the other things I wanted --do you want to comment? 

I think perhaps -- I am glad we all agree there are rules. That is good. Rules currently in effect. I think perhaps what some of the witnesses have highlighted is there may not be perfect compliance with the rules right now. The RNC I am sure is complying with rules and putting disclaimers on everything, but there may be other groups out there that are not complying, and you mentioned the google ao. It was one of course where we agreed that what was happening under the specific circumstances using the specific ad platform that google was using subject to the technological limitations and abilities of that tech platform at the time, what they were doing is okay. That is really what that ao said. And it didn't say anybody under all circumstances can use the click through as a substitute for a disclaimer. It does not say that. It does not say that everybody under all circumstances can use a click through in order to put in a full disclaimer on it. It is good that we have agreement on that. I think it is more of a compliance problem than a deployment problem, which I want to give you an opportunity because I see you want to say something about that but I also want to at some point as the witnesses if they have suggestions for us on how we can promote better compliance and understanding that really these are the rules and everybody has to comply with them. 

I am glad you brought up the compliance. That is something that a number of people on the panels yesterday, paul ryan and brendan fisher and professor. Kim all talked about that. I asked professor. Kim several questions about this because the first panelist referred to her work and we had a opportunity to talk to her directly and I asked her to supplement the record. I have not yet seen any ads and maybe she has them appended to her study and I could not pull them, but that show somebody who is governed by our rules of pain for a political ad with express advocacy did not include a disclaimer and I am sure there are people. I told you last season there is a guide on the street who is a big billboard at his diner and he said vote for hillary clinton without a disclaimer on the billboard. I am sure we can find all kinds of examples of people not complying with our disclaimer rules. That would not surprise me. But I think the number of people doing that is incredibly small. I think the notion that we are building up this premise that there are all these people who are not complying with our rules and therefore we have to change anything, it is really not on firm foundation. That is something we have to tease out with the witnesses yesterday and when I asked one of them, which at specifically can you show me? He was not able to offer any specific example. He said speak to professor. Kim. She hopefully will supplement the record with the kinds of ads you are talking about. Again, notion that number one, there are no rules which we just dispelled there are rules and number two there are people out there taking advantage of it, again, it is on faulty foundation. Also, the issue we talked about briefly yesterday, notion that the russians are taking advantage of all of this, ms. Scurato referenced the usa today article on page 10 of her comments that the russian- based internet agency placed 3500 facebook ads and that is based on information released by the house intelligence committee but what is not included in your comments is that usa today took a look at those 3500 ads and only 100 of them, I think 100 of them were referencing either a federal candidate. Of those 100, I am not even sure because I have not looked at them myself. But I would be surprised if all 100 of them contained express advocacy. My guess is that most of them did not. You're talking about a small number of ads. I think a letter we received yesterday from a senator references that the russians paid $100,000 for ads placed on the internet and I don't know how many of those have express advocacy but how much did the party committee spend in the last cycle. $100,000 is a minuscule amount of ads. 

Is a competitive u.s. senate race in a state of one .3 million people. I spent $2.3 million in online advertising. 

That was just online? 

Yes. That is in one on my dish online senate race. A senator is writing us about russians spending $100,000 on online ads. I don't have a calculator but that is an incredibly small percentage. 

The also have information that the russians were spending millions of dollars . 

On issue ads we have no jurisdiction over. 

I think that is somewhat debatable whether we have jurisdiction on ads placed for the purpose of influencing an election over a foreign government. 

That is not what we are talking about here and definitely not within the jurisdiction of this rulemaking which was from the start crafted to be very narrow, and I was thankful to be able to get anything to this point in the process so that was the trade-off that we are doing something that is very narrow. I think what happened in the last few years is because of the publicity over this, people became very sensitized to the notion that they are not necessarily knowing where the information is coming from that they are seen online -- seeing online. I think we put the notion of fixing our internet disclaimer galatians out for public comment and we have six comments are seven comments and when we did it last her we had 150,000 comments. People are more concerned now about where the information is coming from that they are seeing. We want to make sure to the best of the ability we have we are providing that requirement that information. I think that is part of the concern that is underlying this. 

I agree with you that there is additional concern. However, I think part of that is because I think people and the press plays a role in this, people are putting out information that is just not true. We do have rules on internet advertising and most people are complying. I think again if you start out with the wrong foundation, you can understand why people are concerned. 

I am not sure about the wrong information part, but I will go back to my question to the panel, which is, if you have any suggestions for us as to how we cannot only better inform the public about where the information is coming from that they are seeing on their phones and tablets and laptops, but also, how do we better inform the people that are placing the ads about the requirements and making sure that as we all agree here, that is great. People say we never agree. We do all agree there are currently rules that require disclaimers on digital ads. So that is great. Do you have suggestions for how we can better get that message out and make sure people understand those rules? Particularly for people like you at the RNC, I would think you are complying with the rules and you know what the rules are and you are complying with them. I would think you want everybody else to be complying with them so that you are not at some kind of competitive disadvantage. 

I want to clarify. Neither of us work for the RNC. 

You are right. For both of our committees, we are doing everything we can -- we disclaim on every online ad we run. I would look at what the networks are doing, particularly facebook and google. Facebook is road rolled out its reporting tool which will no doubt go through a variety of changes and google is in the process of doing there's which will go through changes. I think implicates the need for flexibility in whatever rule is set here. But the network is taking the lead on this and I think right now today you can go to a link on facebook and look up any actor who is governed in the political sphere and meeting disclosures and not even meeting those disclaimer requirements but who listed their own name on their facebook page and you can find whatever ads they are currently running. So the networks are tackling this problem and they are no doubt going to impose their own requirements regardless of what this panel does and we would urge flexibility for that reason among others. 

One of the things I wanted to go back to is what we support is having that full disclosure. That would alleviate some of the concerns that you raised about having a different ad depending on the platform. By far, that is our approach, we do believe the full disclosure should be on the face of the ad. Again if it travels across the internet ecosystem which ads tend to do, that would alleviate any of the concerns of the adapted disclosure also been intrinsic to that medium. Also, just the fact that we do think when you do have that adapted disclosure, it should be clear and straightforward. It should really trigger for individuals the importance of that adapted disclosure, that you will get further information about who paid for this ad and why you are seeing it. One of the things mentioned yesterday from cdt is that they support studies that is where we need to go in terms of the adapted disclosures on what is that right symbol and what is that right thing that we need to embed in these ads that need adapted disclosure and that is something we do agree with and maybe that is where we need to go to get to the right solution. 

I think it is worth pointing out that one of the things that both proposals have suggested is a modification of public communication definition, which right now only addresses paid advertising on websites. Arguably, something could make the argument that it does not apply if it doesn't show up on the website and only shows up on an application or in some other digital format. I think that actually would be helpful as an improvement. 

Any other questions for the panel? I think that brings us to the end of our hearing. Thank you and that was helpful information and conversation. Thank you to all of the staff who have helped us throughout this hearing and the office of general counsel and lisa stephenson and jessica and everybody and particularly to the four of you. You have done a lot of work and it will be fun working with you over the next few weeks and months to hopefully come up with a final rule. Thank you to those of you who helped bring people up from the lobby and greeted them with warm faces. Thank you to laura who helped us facilitate the whole meeting. Inc. You to our i.t. division who have been here both all day yesterday and all day today and there are others from your division listening. Mr. Palmer recommended having you guys available because a lot of this technical stuff that may be harder for us to grapple with, these guys know what they are doing and they can help confer with us afterwards on how to craft this. 

And jim jones who got us up on youtube and people who want to chew through this and more can no to the youtube channel and go to our website and find a link to that to listen to the whole thing all over again . Also, believe it or not, there were leftovers from lunch yesterday, so I want to invite everybody in the room and anybody in the building until the sandwiches run out to join us in the conference room next door. 

Did you want to reiterate the record. 

Should we say a specific amount of time? 

The records are going to remain open if anybody wants to supplement the record from witnesses only for the next two weeks. Does that sound good? Two or three weeks. 

If anybody not a witness wants to weigh in, feel free to send it. It will be an ex partake contact. 

Also our offices who have helped throughout the process and in particular amy and tom who have been the leaders on our side of this but that doesn't mean that everybody hasn't been fabulous and we appreciate all the hard work. We appreciate it inc. You to all of you. --thank you to all of you. 

>> [hearing concluded]