AO 2008-14: Internet campaign TV station qualifies for press exemption

Various news stories, discussions, commentaries and other web programming proposed by a corporation operating an Internet campaign-TV station would not result in a contribution or expenditure under the Federal Election Campaign Act (the Act). Instead, those activities would fit into the Act's "press exemption," including certain solicitations on behalf of featured candidates under limited circumstances.

Background

Melothe, Inc. (the corporation), a for-profit corporation engaged in developing technology and providing technical capabilities for Internet web sites, plans to launch and operate an Internet TV station that would cover the campaign(s) of one or more federal candidates. The corporation would produce and transmit live and pre-recorded programming daily from the campaign's headquarters. This programming would be viewable for free by the general public through an interactive multi-channel Internet TV Web site. The content of the corporation's web site likely would feature and support Democratic candidates. The corporation is neither owned nor controlled by any political party, political committee or candidate. It hopes to commercialize the web site by generating ad revenues and selling merchandise.

The corporation also envisions that program hosts, interviewers and news anchors would solicit contributions during programming. Hyperlinks to campaign fundraising pages would appear on the web site. However, the corporation would not act as a conduit or intermediary for those contributions.

Analysis

Press Exemption. Under section 431(9)(B)(i) of the Act, known as the "press exemption," the term "expenditure" does not include any news story, commentary or editorial distributed through the facilities of any broadcasting station, newspaper, magazine or other periodical publication. The press exemption does not apply if the facilities are owned or controlled by any political party, political committee or candidate. Under FEC regulations implementing the press exemption, the costs of news stories, commentary or editorials by broadcasting stations, web sites, newspapers, magazines or other periodicals, including Internet and electronic publications, are exempt from the definitions of "contribution" and "expenditure," provided that the facilities are not owned or controlled by any party, political committee or candidate. See 11 CFR 100.73 and 100.132.

To determine whether the press exemption applies to a particular situation, the Commission first asks whether the entity engaging in the activity is a press or media entity. Second, it applies a two-part analysis to determine that the entity is:

• Not owned or controlled by a party, political committee or candidate; and
• Acting as a press entity when conducting the activity at issue. See Reader's Digest Association v. FEC, 509 F. Supp. 1210, 1215 (S.D.N.Y. 1981).

In order to determine whether an entity is a press or media entity, the Commission focuses on whether the entity is in the business of producing on a regular basis a program that disseminates news stories, commentaries and/or editorials, including doing so through a web site. Because the corporation’s proposed web site will provide daily news reports, interviews and commentary related to particular political campaigns, the Commission concluded that the proposed Internet content, for the most part, falls within the normal business of news coverage. Although its content is calculated to appeal to supporters of a particular party, the Commission does not investigate an entity’s viewpoints in determining its status as a press entity. See AOs 2007-20, 2005-19 and 2005-16.

The Commission accepted the corporation's representations that it was neither owned nor controlled by any party, candidate or political committee, and that it would exercise control over all content displayed on its web site. The Commission then considered whether the proposed activities would include news stories, commentary and editorials, and whether the materials would be available to the general public and in a form that is similar to materials ordinarily issued by the entity. The corporation was able to satisfy on its face the public availability of the materials on its web site and represented that it would not deviate in any form from its ordinary planned news media activities to delve into more traditional forms of campaigning. Accordingly, the Commission determined that the corporation's Internet media content were legitimate press functions.

Volunteer Briefing. The Commission declined to render an opinion regarding the corporation's proposed daily live segment briefing campaign volunteers because it was unclear whether the program envisioned coverage of campaigns themselves briefing the volunteers or whether the corporation would prepare and provide the briefings. The Commission noted that, if the corporation were to prepare and provide the briefings, it would be tantamount to a corporation providing personnel to a campaign, a prohibited activity outside the press exemption.(1)

Solicitations. The corporation also proposed including solicitations on behalf of candidates in its programming. Although the corporation would not serve as a conduit, it would enable links to the fundraising web pages of a campaign, and its commentators would make the solicitations. Without additional information provided, the Commission declined to render a definitive opinion on this aspect of the proposal. It did note, however, that under its previous interpretations of the press exemption, nothing prohibited commentators and program guests from suggesting that viewers make contributions to specific candidates. It also noted that the intermittent provision of a hyperlink would not be prohibited. However, because providing a mechanism for raising funds is not a typical press function, adding a contribution page or providing a permanent hyperlink to a fundraising web page does not fit into the press exemption. Moreover, if unpaid solicitations for particular candidates became a regular feature on the corporation's web content, it would go beyond the scope of previous rulings and be tantamount to a prohibited expenditure.

AO 2008-14: Date Issued: November 13, 2008; length: 7 pages.

(1) A similar analysis was applied to recognition of campaign volunteers. While the corporation could cover such an event as part of its news coverage, it could not itself give out awards or recognition.