New Wine Into Old Bottles: Adapting Text Messaging Proposal To 1970's Era Rules Gains FEC Approval

The Federal Election Commission approved a proposal earlier this week to allow contributions via text messaging in federal elections. With the lawmaking process ill-equipped to keep pace with developing technologies, the success of this proposal – a year-and-a-half after the FEC rejected another text-messaging proposal – suggests that the path to approval for tech entrepreneurs in the political space lies in tailoring their business models to forty year-old laws.

The plan approved by the FEC through an advisory opinion has a number of features that meet longstanding recordkeeping and reporting requirements, and satisfy rules that apply to vendors using more traditional means to process political contributions. For example:

Donations will be capped at $50 per cell number per month. Under current law, a committee has no obligation to collect the name and address from any contributor giving $50 or less. Wireless users will "pledge" funds to a political committee, with an aggregating company transmitting the amount from its corporate treasury to the political committee. Once subscribers pay their bills, wireless service providers will transmit the payments, less fees, to the aggregating company. The FEC concluded that this arrangement fits within longstanding rules for giving a political committee an "extension of credit," primarily because the aggregating company will provide the...