Comments filed by OMB Watch in the Federal Election Commission’s (FEC) rulemaking proceeding on regulation of Internet communications ask that the FEC "step back and allow the Internet to flourish as a public square where all are invited and all can be heard." The comments note that the Internet has empowered ordinary citizens, as seen in the 2004 election, and that key assumptions justifying regulation of campaign finance do not apply to most Internet communications. The comments propose that Internet postings and emails on one’s own site be exempted from the definition of regulated contributions or expenditures. This would "allow people full use of the Internet to engage in politics without fear…", but "would leave unaffected payments made for banner ads or other forms of Internet advertising on other people’s websites." The increased interest in voter education and mobilization by nonpartisan nonprofits in 2004, much of it occurring on the Internet, was cited as a development that should be "applauded and nurtured", and not lost to regulation based on “speculative harms”. A website operated by OMB Watch, NPAction.org, provided tools to assist nonprofits with these efforts and saw heavy traffic during the election season. The comments demonstrate that "many of the underlying premises of campaign finance regulation do not hold on the Internet." For example,

• The link between money and influence is reduced, since "Open access forecloses dominance by the well situated or by the wealthy."
• The Internet also blurs the lines that separate the press from bloggers, advertisers and groups like OMB Watch that publish on websites. Attempts to use the exemption from regulation for the press would only create confusion and arbitrary outcomes. The comments note, "To stretch the existing press exemption shoe to fit the big foot of Internet publishing will render the press exemption meaningless."
• Campaign finance regulation assumes that "the source, the publisher and the audience are easily distinguished". This creates problems defining how the rule restricting republication of candidate materials would apply to common Internet tools, such as links, forums or audio/video communications. The comments argue against limiting these kinds of Internet communications.

The FEC proceeding is the result of an order from a federal court to reconsider its exemption of Internet communications from campaign finance regulations. The FEC proposed new rules in March, and will hold a public hearing in late June. No date for publication of a final rule has been set.