VFM Entry Fee Discussion

Main point: It’s better to charge an entry fee than to require media entrants to collect signatures, because an entry fee has far lower social cost. Entry fees generate funds for running the contest that would otherwise come from other student fees, whereas collecting signatures creates little social benefit and increases administrative costs.
================================

UBC’s voter-funded media contest offers substantial attractions for entrants: the $8000 award pool, exposure to many students readers, and the chance to influence votes, AMS elections and policies. If we don’t impose a hurdle to entry, we can expect a large number of entrants, many of whom may be low quality, which would overly tax the limited time of voters and electoral candidates.

So for the first VFM implementation in January 2007, the AMS charged a $100 entry fee, resulting in 13 contestants – enough for competition and diversity of views, but not excessive. The idea is that only those with a serious chance of winning a prize would enter. The planning committee for the coming 2007-2008 contest is proposing a $150 entry fee, because VFM is now much better known and the entry period will be much longer.

One possible alternative to an entry fee would be to require media entrants to collect some number of student signatures. To be an equivalently effective hurdle, this should cost about $150 worth of effort. I don’t know what the right number is, but let’s suppose it’s around 150 signatures.

So the cost to entrants would be about the same with either hurdle, but the net social cost would be much higher for the signature hurdle. This is because the fee is a transfer, creating a benefit of revenue to the AMS, whereas the time spent collecting signatures is a social cost creating little or no social benefit. In fact it creates additional costs: pestering students to sign, and needing administrators to check whether signatures are valid.

As for whether the signers provide any intelligent screening out of low-quality media entrants, it is much harder for them than for voters deciding the awards at the end of the contest. By that time, voters will see the actual performance of all media, aided by media critiquing each other. The contest voters will be a far more representative cross-section of students than the friends called upon by an entrant for signatures. They will better judge which entrants deserve awards, thus more than refunding the entry fees of helpful media.

Like last year, the entry fees can be used for paying the VFM Administrator and much needed publicity for the contest. With a signature hurdle, those costs would come out of other AMS funds.

The principle here is the same as in the famous phrase “no free lunch”. Some people seem to think that benefits paid for by government are like manna from heaven – free. But we pay for them in our taxes or reduction of other benefits. Likewise but in the opposite direction, there is “no fee lost”: Fees paid to the government don’t vanish down a rat-hole. They reduce our taxes or pay for benefits.

One caveat to these principles is that they are less true the more corrupt a government is. With a very corrupt government, maybe fees do disappear down a rat-hole. Does the government belong to all the people, or to a small group of rats enriching themselves at public expense?

We can thus expect voter-funded media to influence public policy toward broader implementation of green taxes and other user fees for limited public resources, for two reasons: First, they will guide and educate voters to recognize the “no fee lost” principle. And second, as watchdogs they will reduce perceived and actual corruption in government. To achieve all this, media will have to build their reputations for loyalty to voter interests. Voter-funded payments will reward them for this long-term investment.

Vancouver recently saw a clear illustration of the need for building public trust and understanding of the benefits of user fee systems:

“It was unfortunate but not unexpected that motorists reacted with kneejerk anger to news that the Greater Vancouver Regional District will study options for road pricing. The concept – charging tolls to use the region’s existing bridges and perhaps its roads as a way to control congestion – isn’t popular. That’s no big surprise. Nobody wants to pay more for anything, least of all to drive cars in an era of already high fuel prices. When the phone calls and e-mail started pouring in, regional politicians ran for cover…” [Abbotsford News, 2007-03-06]

Returning to the VFM entry fee issue, see Mike Thicke’s posting below for a range of views from 2006 (his, Gina Eom’s, and mine). The link may not be working because of recent server problems at theknoll.ca, so I’ve pasted in the full text also.

www.theknoll.ca/vfm/2006/12/11/the-vfm-entry-fee
Posted by Mike Thicke, 2006-12-11:

The VFM Entry Fee

The Voter-Funded Media contest has a prize pool of $8000, but it costs each contestant $100 to enter. As Gina Eom recently pointed out, this represents an “access barrier to students entering the contest”. $100 is a large amount of money to the average student who is already feeling the pressure of unacceptably high levels of tuition.

The contest is already prejudiced towards students who are able to devote time to self-promotion and quality coverage of the elections. Many students have to juggle multiple part-time jobs with full course loads, and an extra $100 burden on top of that might push the contest over the edge into being blatantly discriminatory.

I was on the committee that adapted Mark Latham’s Voter-Media contest for use in the AMS executive elections. In our preliminary discussion of the contest, when the proposed entry was $200, I wrote:

Having the $200 entry with a high expectation of return and high variance will, I think, result in the field being mainly larger institutional media than single intrepid reporters. Larger institutions can stand the variance much more easily than an individual, because they have a larger pool of money to start with. The Ubyssey with its $350,000 (this surprised me, btw) annual budget wouldn’t mind another $5,000 but it won’t break the bank if they just lose $200.

My feeling is that to combat this both the variance and expected return need to be reduced. Good reporters with minority viewpoints should not be discouraged from participating because they don’t expect people to like what they have to say. Media providers should not have to labour under such uncertainty that they might be getting reimbursed for thousands of dollars, or nothing. Rather, I think it would make more sense to make the probability of winning some portion of the purse higher, and make the maximum prize available lower.

I would also like to reduce the entry fee required to be in the contest, perhaps replaced by some other hurdle, such as a full budget proposal and statement of intent - ie. discourage joke / selfish entrants by making it not worth their trouble. Then make the maximum award something more reasonable, like $500. There is still some incentive to do a good job, but covering the election won’t replace your day job. Thus you are more likely to get contributors who care primarily about the democratic process.

I probably didn’t push this issue as much as I should, and to be honest I thought $100 was a reasonable hurdle to clear. Of course I recognized that there was some prejudicing of candidates, but the primary goal of the contest was never to be perfectly fair to entrants. It was one of the goals, but it was a goal that could be compromised in order to further the primary goal of bringing better information to the voters.

The issue of entry fees was discussed by the committee, with suggestions ranging from $0 to $35 to $200 being considered. In the end we voted on a $100 entry fee, and I believe all of us were reasonably satisfied with that level. The contest passed through two discussions at council and one open meeting without the entry fee issue being raised as an issue of marginalization. It was only brought up in context of who controls that money and how it will be spent. This might be a telling reflection on the composition of the AMS council, or it might just be an oversight.

After the contest had been approved, Gina wrote to the committee expressing her concerns. Here is a summary of her position that she copied to Kevin Keystone (AMS President) and the AMS Archives:

Hi Everyone,
cc. AMS Archives, Kevin Keystone

I would like to document my sincere disappointment of this creation of an access barrier to students entering the contest. The sensitivity of socioeconomic barriers should be a priority on a student’s mind. Through its ignorance we are perpetuating the cycle of the financially strapped student having to work, and not have the luxury of being entertained with ideas entering the public sphere. Entrance of the contest does not equate a guarantee of profit. In fact, a loss of 100$ is a huge loss and not worth the gamble of a struggling student. This is a huge demotivating factor.

Yes Council approved it, and yes I sit on Council. I suppose this is why I asked that this trial year be renewed with the current council (NOT October), to iron out small (or in this case, huge, IMHO) practical flaws of the workings of this.

I propose there be a system in which students can apply for this fee to be 1) waived or 2) refunded. The implementation of this system should be retroactive, or pro-active, depending on how inclusive the VFM committee wants to be. As a side note, if inclusivity is not a guiding principle of this project, then what is?

Another side note - I’ve asked to see all the minutes of your committee, and I did not see a lengthy discussion on the 100$ fee.

Thank you for your time.

Gina Eom

This is one of my responses to her concerns:

Hey Gina,

Over the period that we were discussing VFM I brought up the entry fee thing several times, but I never really got much traction on it. I agree with you - this isn’t the best kind of barrier to be erecting in the name of filtering out “unserious” entrants. There was never a serious discussion of alternatives to a monetary entry fee. I suggested some sort of more involved application process, but nobody seemed to like that idea. Perhaps because my financial situation is different than most, I didn’t push on it as much as I could have.

The alternatives to a monetary entry fee seem to be some sort of labour-intensive process, or an active filtration where we rule on who is or isn’t a serious candidate. The second option goes totally against what we want to do, and the labour intensive process might be more inhibiting than a monetary one… it would also require much more of us / the elections committee. I think we could have found a better solution, but we didn’t.

Having no filtration at all would probably result in a mess, where it is difficult for the voter to get useful information. It could also lead to many entrants who were in the contest without any intention at all of covering the election. And of course it would lead to endless headaches for whomever was administering the contest. There would also be an issue of funding for promotion of the contest, which is currently being covered by the entry fees.

This contest is an economist’s experiment in democracy. It is rooted in capitalist ideology. It is not exactly the way I would design something like this, but I’m not the one putting up the prize money. As Steve says, the guiding principle behind this is serving the voter, not serving the media. Inclusivity is somewhat derivative from that - an inclusive process will help the voter more than an exclusive process. But in the end the needs of the voter supersede the needs of potential contestants, and there needs to be a balance between inclusivity and effectiveness.

That being said, I don’t think $100 is all that exclusive to students, especially considering the potential returns. It could also encourage students to team-up more, to share the cost among a greater number of people. Larger groups are more desirable from a quality of information perspective.

And this is what Mark Latham wrote:

Thanks Gina for asking (email below) for my views. Although the committee hasn’t asked, and I prefer to keep my nose out if not invited, I think I should speak up.

VFM is all about shifting power from small elites to all voters. I’m excited about the potential for this to spread throughout democracies and corporations, improving social welfare while lessening disparities of power and wealth. For VFM to spread, it’s very important for it to succeed in this first test implementation at UBC.

The primary goal of VFM is to better inform voters. To be seen as successful, VFM needs to deliver on that goal.

I agree with Gina’s concern about excluding neglected voices from the VFM process. The $100 entry fee is a compromise that the committee reached, trading off between opening access to all potential contestants and protecting voters from the information overload of having too many media contestants for voters to be willing to look through. To encourage high quality information, we would like all entrants to believe they have a serious chance of earning enough voter support to win a prize. The entry fee helps us achieve that.

While a $100 fee is clearly more of a hurdle for less wealthy students, likewise the cash awards are more of an attraction for those students. So the contest is not all stacked against them, and the cash award effect is probably stronger than the entry fee effect. As Mike pointed out: “I don’t think $100 is all that exclusive to students, especially considering the potential returns. It could also encourage students to team-up more, to share the cost among a greater number of people. Larger groups are more desirable from a quality of information perspective.”

The entry fee acts like an automatic governor on the number of media contestants. With an $8000 award pool, entrants probably wouldn’t want to pay more than a total of perhaps $2000 in entry fees, given that they also need to work to win an award. With a $100 fee, that means about 20 entrants. We are trying to help busy voters. Twenty contestants may already be too many. If we open the door to more potential entrants who need not pay a fee, the governor is removed and risk of overload increases.

As we discussed in committee, having an automatic governor keeps all discretionary control of media funding in the hands of voters rather than the government (or government appointees who control access to the contest).

So the entry fee is not just a way to pay the costs of running the contest. It is an essential part of the VFM system design.

Suppose the financial need criterion chosen for a fee waiver is one that 10% of students would qualify for. Out of 43,000 UBC students, that’s 4,300 people. Of course most would not enter, but we would be saying to those 4,300 that they can enter this cash-prize contest for free, whereas anyone else has to pay $100. That’s an attractive open door. If most of the 4,300 don’t even hear about it then it wouldn’t cause a flood of entrants, but we are publicizing the contest as much as we can, and to be fair we should publicize all the rules.

Those who are considering entering the contest and paying the fee have to think about how many other entrants there are likely to be. If we open the door to more entrants who don’t have to pay a fee, some of those who would have paid to enter may well decide not to enter at all.

Recovering $100 from awards won after a fee waiver doesn’t reduce the open-door problem much. Instead of free access to an $8000 contest, it becomes free access to a $7200 contest.

Besides the administrative burden of defining and applying the financial need screen, some problematic issues are likely to arise. We expect some people to enter as groups rather than as individuals. We would have to make rules about groups that contain some financially needy students and some not. A group’s membership may change over time, as some may join and some leave. It would be difficult to monitor whether those doing the writing and receiving possible award funds are the needy students or not; this applies to individual entrants too.

The contest is open to non-UBC entrants, who are now treated equally with UBC entrants (except that the judges/voters are all UBC students). I guess only UBC students would be eligible for the need-based fee waiver. This unequal treatment would make it even less likely for us to attract off-campus contestants.

We have already been publicizing the contest with the rules that we agreed on. The $100 fee is in the code changes and the press release (file attached), on our websites and in presentations given. People have already been making their decisions to enter based on those rules.

If the VFM system can prove its value in this first implementation, it will be used again and grow stronger. We will all learn more about how it works and how to improve it. New media will build their reputations, and voters will use them more. Then we can try various possible enhancements to the system.

But for now, please don’t make this change. It would endanger VFM on its fragile first step.

– Mark

The entry fee is a more complex issue than first appears, as it is trying to balance two concerns:

1. Be as inclusive as possible
2. Ensure that the quality of information is as high as possible

Probably a better way of achieving these goals would have been to require each participant to gather 50 signatures before being entered in the contest, just as AMS Executive candidates must do. This would cut down on the noise ratio quite a bit without further marginalizing students. However, I don’t think we can implement this system for this iteration of the contest, as:

1. There is not enough time.
2. The VFM contest needs to cost nothing to the AMS, and it needs this money to pay for a coordinator and promotions.

It is unfortunate that Gina or I, or anyone, did not propose something like this earlier, but at this point we have to live with what we’ve got, and attempt to evaluate the possible effects of the entry fee after the contest is completed.

I would very much like to hear from any students who would like to be in the contest but feel the $100 is prohibitive to them. There is a real danger that we will never be able to find such students, as their voices will be silenced (as often happens in such circumstances). The more students who voice concerns on this issue and provide alternatives to the current structure, the better able we will be to find a solution in the future.

-Mike