AO 2012-31: Reduced rates for text fundraising not considered a contribution

A wireless cell phone service provider may charge political committees a lower rate for fundraising by text message than it charges to commercial content providers, without making a prohibited corporate contribution.

Background

AT&T proposes to establish a new rate structure for political committees that receive contributions by text message over the company’s premium SMS platform as described in AO 2012-28 (CTIA II). The rates would likely be substantially lower than those AT&T charges commercial content providers to use its text message platform, but would cover the company’s costs as well as a profit. The rates would be based on commercial considerations, and would be offered on the same terms to all political customers.

AT&T asked if this new lower rate structure for processing contributions to political committees would be viewed as a prohibited in-kind contribution from the corporation under the Federal Election Campaign Act (the Act) and Commission regulations.

Analysis

The Act and Commission regulations prohibit corporations from making contributions in connection with federal elections. See 2 U.S.C. § 441b(a); 11 CFR 114.2(b)(1). A contribution includes "any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for federal office." 2 U.S.C. § 431(8)(A)(i); 11 CFR 100.52(a); see also 2 U.S.C. § 441b(b)(2); 11 CFR 114.2(b)(1).

"Anything of value includes all in-kind contributions," including the provision of goods or services without charge or at a charge that is less than the usual and normal charge. See 11 CFR 100.52(d)(1). “Usual and normal charge" is defined as the price of goods in the market from which they ordinarily would have been purchased at the time of the contribution, or the commercially reasonable rate prevailing at the time the services were rendered. See 11 CFR 100.52(d)(2).

The Commission determined that AT&T’s proposal to charge political committees lower rates than commercial content providers will not result in a prohibited contribution because it reflects commercial considerations and does not reflect considerations outside of a business relationship.

Date issued: September 20, 2012; Length: 5 pages.

Resources:

• Advisory opinion 2012-31 [PDF; 5 pages]
• Commission discussion of AO 2012-31 [mp3]