Federal Election Commission Main Page
June 23, 2000
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2000-13
John J. Duffy
Steptoe & Johnson
1330 Connecticut Avenue, N.W.
Washington, D.C. 20036-1795
Dear Mr. Duffy:
This responds to your letter dated May 25, 2000, on
behalf of Ampex Corporation ("Ampex") and its wholly-owned
subsidiary, iNEXTV Corporation ("iNEXTV"), requesting an
advisory opinion concerning the application of the Federal
Election Campaign Act of 1971, as amended ("the Act"), and
Commission regulations to iNEXTV's proposed video coverage
of the Republican and Democratic national conventions over
the Internet.
Background
You state that Ampex, a for profit corporation, is one
of the world's foremost innovators of video technologies.
Ampex's stock is publicly traded and widely held and Ampex
is not owned or controlled by a political party, political
committee, or candidate. One of Ampex's wholly-owned
subsidiaries is iNEXTV. According to information on the web
sites of Ampex and iNEXTV, iNEXTV holds Ampex's Internet
video programming operations and controls a network of
affiliates that webcast content, including original content,
for special interest public audiences. For example,
www.istyletv.com, based in New York City, provides news and
information concerning travel, sports, leisure activities
and fashion; www.aetv.com, based in Los Angeles, features
news and information concerning the entertainment industry
and classic television shows, and www.exbtv.com (Executive
Branch Television or "EXBTV"), based in Washington, D.C.,
focuses on news and information about the Federal
government. iNEXTV's web sites are supported by the sale of
commercial advertisements.
The EXBTV web site features original programming such
as reports and commentary by Hugh Downs on a wide variety of
public affairs issues; and interviews and discussions
conducted by Mr. Downs or Jed Duvall with public officials,
educators, journalists, and presidential candidates. It
also includes a "forum" whereby viewers may state their
opinions on specific issues via computer. The web site
provides a special page for each of a large number of
cabinet departments and Federal agencies. From those pages,
the viewer can click on to video "events" such as meetings
conducted by the agency or speeches made by agency
officials, or related news events. The page will also
include some basic information about the agency and a link
to the agency's web site. The web site provides the same
feature for international organizations. The viewer may
also click on to Congressional hearings and floor debates
and conferences of business leaders (including a "live"
feature). The web site also has a polling feature where
viewers may answer questions about specific issues, and the
results are posted on the site.
iNEXTV intends to extend EXBTV's coverage of
governmental affairs this summer to include gavel-to-gavel
coverage of the Republican and Democratic national
conventions. Its coverage will also contain interviews with
political experts and candidates, as well as commentary by
Hugh Downs and Jed Duvall. You ask whether iNEXTV's
proposed coverage of the conventions falls within the scope
of the Act's exemption from the definition of contribution
for news stories and commentaries by the press.
Analysis
The Act prohibits "any corporation whatever" from
making a contribution or expenditure in connection with a
Federal election. 2 U.S.C. 441b(a). The Act and
Commission regulations define the terms "contribution" and
"expenditure" to include any gift of money or anything of
value for the purpose of influencing a Federal election. 2
U.S.C. 431(8)(A)(i) and (9)(A)(i); 11 CFR 100.7(a)(1) and
100.8(a)(1); see also
2 U.S.C. 441b(b)(2) and 114.1(a)(1) (providing a similar
definition for "contribution or expenditure" with respect to
corporate activity). Commission regulations further define
"anything of value" to include all in-kind contributions and
state that, unless specifically exempted under 11 CFR
100.7(b), the provision of any goods or services without
charge, or at a charge which is less than the usual and
normal charge for such goods or services, is a contribution.
11 CFR 100.7(a)(1)(iii)(A); see also 11 CFR
100.8(a)(1)(iv)(A).
The Act specifically exempts from the definition of
"expenditure":
any news story, commentary, or editorial distributed
through the
facilities of any broadcasting station, newspaper,
magazine, or other
periodical publication, unless such facilities are
owned or controlled
by any political party, political committee, or
candidate.
2 U.S.C. 431(9)(B)(i).1 Commission regulations similarly
exempt from the definitions of contribution and expenditure
any "cost incurred in covering or carrying a news story,
commentary, or editorial by any broadcasting station
(including a cable television operator, programmer, or
producer), newspaper, magazine, or other periodical
publication . . . unless the facility is owned or controlled
by any political party, political committee, or candidate ."
11 CFR 100.7(b)(2) and 100.8(b)(2).
Several factors must be present to conclude that the
proposed activity falls within the cited media exemption of
the Act. First, the entity engaging in the activity must be
a press entity as described by the Act and regulations. See
Advisory Opinions 1998-17, 1996-48, 1996-41, 1996-16 and
opinions cited therein. Furthermore, in previously applying
the media exemption, the Commission cited two criteria,
based on the statutory exemption, that would be relevant to
determining the scope of the exemption. These are (1)
whether the press entity is owned by a political party,
political committee, or candidate,2 and (2) whether the
press entity is acting as a press entity in performing the
media activity. Advisory Opinion 1982-44 (citing Reader's
Digest Association v. Federal Election Commission, 509 F.
Supp. 1210, 1215 (S.D.N.Y. 1981)); see also Advisory
Opinions 1998-17 and 1996-48.
The Commission concludes that, both as to their purpose
and function, iNEXTV and EXBTV are press entities for the
purposes of the Act. Although iNEXTV does not create
programming under its own name, it operates its own network
of specialized news and information sites; these can be
characterized as webcast video periodicals that can provide
a vast array of features due to the capabilities of the
Internet. EXBTV provides a news function for its viewers,
incorporating features such as those provided by C-SPAN (see
Advisory Opinion 1996-48) and other televised news
programming. The web site provides direct access to
governmental and business news events, and its two prominent
journalists generate reports, interviews, and commentary on
current affairs. Moreover, the web site is viewable by the
general public and akin to a periodical or news program
distributed to the general public. See Advisory Opinion
1982-58.3
The Commission also concludes that the other criteria
of the press exemption are satisfied. Neither iNEXTV nor
EXBTV are owned or controlled by any political party,
political committee, or candidate. Moreover, gavel-to-gavel
coverage of national party conventions that includes
interviews and commentary by journalists, by an entity that
covers governmental and political affairs, readily fits into
the categories of news story and commentary set out in the
Act. The Commission thus concludes that iNEXTV, through its
affiliate, EXBTV, would not make a contribution or
expenditure by engaging in the proposed activities.
This response constitutes an advisory opinion
concerning the application of the Act and Commission
regulations to the specific transaction or activity set
forth in your request. See 2 U.S.C. 437f. The Commission
is mindful of the new capabilities and options presented by
use of the Internet. The Commission thus emphasizes that the
conclusions in this opinion are based on the specific facts
and features described above and are not necessarily
applicable to other web sites and operators of those sites
where materially different facts or features are present.
Sincerely,
(signed)
Darryl R. Wold
Chairman
Enclosures (AOs 1998-17, 1996-48, 1996-41, 1996-16, 1988-22,
1982-58, 1982-44, and
1980-109)
_______________________________
1 According to the House report on the 1974 amendments to
the Act, this exception made plain the Congressional intent
that the Act would not "limit or burden in any way the first
amendment freedoms of the press ." and would assure "the
unfettered right of the newspapers, TV networks, and other
media to cover and comment on political campaigns." H.R.
Rep. No. 93-1239, 93d Cong., 2d Sess. 4 (1974).
2 Commission regulations provide that, in the event the
facilities are owned or controlled by a political party,
political committee, or candidate, the exemption would still
apply to the cost of a news story "(i) which represents a
bona fide news account communicated in a publication of
general circulation or on a licensed broadcasting facility,
and (ii) which is part of a general pattern of campaign-
related news accounts which give reasonably equal coverage
to all opposing candidates in the circulation or listening
area ..."
11 CFR 100.7(b)(2) and 100.8(b)(2).
3 The Commission notes that it has previously indicated
that a characteristic of periodicals qualifying as press
entities is that they derive revenues from the sale of
subscriptions or advertising. See Advisory Opinions 1988-22
and 1980-109. You state that iNEXTV's web sites are
supported by the sale of commercial advertisements.