Why Is the Federal Government Threatening Times Square’s Billboards?

Colleagues tipped me off to an absurd news story about how the federal government is threatening to punish New York City for its famously gaudy Times Square electronic billboards:

It is known as the “Crossroads of the World,” the “Center of the Universe” and “the Great White Way,” but Times Square could become like the “Black Hole of Calcutta” if the federal government has its way, CBS2’s Marcia Kramer reported Tuesday.

The feds say many of Times Square’s huge and neon-lit billboards must come down or the city will lose about $90 million in federal highway money.

The edict comes from a 2012 law that makes Times Square an arterial route to the national highway system. And that puts it under the 1965 Highway Beautification Act, which limits signs to 1,200 square feet. It took the feds until now to realize that Times Square was included, Kramer reported.

City Transportation Commissioner Polly Trottenberg agrees.

“The signs in Times Square are wonderful. They’re iconic. They’re not only a global tourist attraction, they’re important to the economy,” Trottenberg said.

She said she’s not going to let it happen.

“We’re not going to be taking down the billboards in Times Square. We’re going to work with the federal government and the state and find a solution,” Trottenberg said.

Some have suggested that this is an example of regulators run amok. It isn’t. This is a classic example of Congress passing stupid laws, ordering regulators to implement them stupidly, and then forgetting about them until unintended consequences spring up down the line. Allow me to explain what’s going on here, as virtually all the news articles and commentary out there provide next to zero context.

As the article noted, in the last surface transportation reauthorization (MAP-21 Act of 2012), Section 1104 created what is now known as the “enhanced National Highway System.” The enhanced National Highway System refers to MAP-21’s amendment to 23 U.S.C. § 103(b)(2)(B) to include, “Other urban and rural principal arterial routes … that were not included on the National Highway System before the date of enactment of the MAP-21.”

In a nutshell, this provision added roads that meet the definition of “principal arterial” to the National Highway System that were not previously designated as components of the National Highway System. Why might someone want to do this? Because arterials not designated as part of the National Highway System are not eligible for Federal-aid Highway Program funding. Based on the current statutes and regulations governing National Highway System designations, roads evaluated to be principal arterials by the Federal Highway Administration’s Highway Performance Monitoring System were automatically added to the National Highway System under Congress’s 2012 law. This included some roadways in New York City.

Enter the Highway Beautification Act of 1965, which was the brainchild of President Johnson’s wife Lady Bird. The Highway Beautification Act, codified as amended at 23 U.S.C. § 131, is the law that unnecessarily imposes federal restrictions on outdoor advertisements within 660 feet of the National Highway System. As an aside, Republicans were so incensed by the Johnson White House’s dumb and statist foray into a trivial aesthetic issue that should have been left to the states and private citizens that then-Congressman Bob Dole introduced an amendment that would have replaced every instance of “Secretary of Commerce” in the bill with “Lady Bird.”

In the case of Times Square, “jumbo” billboards over 1,200 square feet have long been prohibited within 660 feet of a National Highway System right-of-way. Obviously, this does not sit well with many New Yorkers, who are now facing the prospect of losing 10 percent of their federal highway funding thanks to two stupid pieces of legislation enacted almost 50 years apart.

But the most recent change occurred under the watch of one Polly Trottenberg. Trottenberg, now New York City’s transportation commissioner, was the Under Secretary for Policy at the U.S. Department of Transportation when Congress passed and President Obama signed MAP-21 into law in 2012. It was her job to understand the legislation and serve as chief advisor to the Secretary of Transportation on implementation. Apparently she missed a section and is now forced to reconcile her current outrage as a local official with her past incompetence as a federal official.

Update: Welcome, Quartz readers. You should be pleased to know that Quartz was the first news source of which I am aware to actually get this story right. As I noted above, federal regulators are not abusing their authority by attempting to de-glitz Times Square. The problem is an unintended statutory conflict and it rests at the feet of Congress. As Jake Flanagan notes, the Federal Highway Administration has bent over backwards not to turn off the lights or impose the Highway Beautification Act’s 10-percent highway funding penalty.

That said, there are basically three options for New York/FHWA going forward:

  1. Revert the impacted principal arterial National Highway System designations, although removing these roadways from the National Highway System would cost those corridors federal-aid highway funding;
  2. Attempt to carve out a regulatory exemption for the impacted roadways, although an expansive exemption would likely earn the ire of the scenic highway lobby (yes, they exist) and is likely an unlawful expansion of regulatory power; or
  3. Convince Congress to create a statutory exemption for these types of gaudy but culturally significant mega-advertisements in the next surface transportation reauthorization or MAP-21 extension.

Most likely, New York/FHWA will opt for a weak version of the second option, which is to simply update their Highway Beautification Act agreement to permit this type of signage, as described at 23 C.F.R. § 750.706. However, this updated agreement would impose size, lighting, and spacing restrictions on new signs. In very dynamic Times Square, where bigger and louder is better and this is essentially official policy, imposing rigid restrictions on future advertising is nonsensical. New York should not need to go through the lengthy update process of their Highway Beautification Act plan whenever someone proposes to build a mega-jumbo sign that exceeds the limit contained in the agreement. 

Personally, short of repealing the Highway Beautification Act, I find the third option to be the most appealing. Congress should accept responsibility for this legislative failure and fix it.