FEC Waiver Could Spur Political SMS Ads

In a move that could help spur SMS usage in the U.S., the Federal Election Commission has given a New Jersey-based text messaging company a waiver regarding disclaimers on political ads sent over wireless text messaging platforms.

The opinion, issued Thursday, would exempt SMS (short message service) from running disclaimers about who paid for ads.

Target Wireless had asked for the exemption from the requirements because of the 160-character limitations on text messaging. The petition reportedly had the support of advertising industry trade groups and the Republican National Committee.

The move could help pave the way for a new realm of political ads inserted into advertising-supported, opt-in content delivered to cell phones and other wireless devices such as Blackberries and PDAs. But it is also sure to spur even more debates — possibly consumer backlash — over whether a new strain of wireless spam could be unleashed to consumers.

The company argued that disclosures in SMS-based ads, such as “paid for by the Republican National Committee” would consume 80 characters, for example. Even longer ones, such as “Paid for by the Fisherman’s Union PAC and not authorized by any candidate or candidate’s committee” would consume 98 characters, leaving little room for the message itself.

“When you take out the content, there’s not a lot of room left for the message,” said Craig Krueger, president of Target Wireless. He said the disclaimer rule would be burdensome to fit in political messages such as “Knighthorse-Campbell believes in education.”

The FEC has plenty of precedent on which to base its advisory opinion to allow the exemption in this case. It already allows exemptions on the disclaimer rule with car bumper stickers, pens, pencils, even skywriting involving political advertisements. “This petition fit right into the bumper sticker argument,” Krueger said.

In its opinion, the commission told the company “the wireless telephone screens that you have described have limits on both the size and the length of the information that can be conveyed. Indeed, the (c)omission notes that the SMS technology places similar limits on the length of a political advertisement as those that exist with bumper stickers.”

Target Wireless had also suggested in its petition that it could provide “certain alternatives to allow recipients to ascertain the identity of the sponsors of political messages (a telephone or website reference). Nothing in this opinion would preclude Target’s use of these approaches,” wrote Karl J. Sandstrom, FEC vice-chairman.

Despite the company’s clearly-stated plans to offer the messages as part of content that a consumer would opt-in, or elect, to receive the exemption already has the company defending itself that “political spam” would not be part of its plan.

“The issue is not about spam, our issue was merely about disclosure, which the FEC had precedent to support,” said Kreuger, who also said he’s received about 20 angry e-mails so far over the issue.

“Our petition clearly says the messages would be opt-in, that it has to be linked to content. The notion that people will get spammed, that carriers are going to give people’s numbers out for spam is ludicrous. I understand people’s sensitivity to spam. We don’t spam.”

And don’t expect political parties and other causes to deploy SMS-based ads during this year’s election for that matter, Kreuger added. “It’s too close to election time in November. But I think in a couple of years, it could prove significant. The ball is now in the content providers’ court, I think, to come up with new ways to price information and provide lower-priced, ad-supported content. Rather than acting like pay-per-view operators, they could embrace the advertiser-supported model” regarding providing smaller bursts of content for free or less cost.

The opinion also arrives as U.S.-based wireless carriers increasingly work together on providing interoperability for SMS messaging across different networks and platforms, much the way their European-based counterparts have for years, which helped spur explosive growth in SMS usage overseas.

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