CBS-TV reported that the feds are threatening to withhold $90 million in federal highway aid–10 percent of New York's total–if the signs are not removed or drastically reduced in size. A 2012 law reportedly puts the "Crossroads of the World" under the aegis of the 1965 Highway Beautification Act that limits signs to 1,200 square feet, or about 35 by 35 feet. Many signs in the Times Square, including ones that advertise Broadway shows, are several times that size.
The Federal Highway Administration has now issued a statement countering CBS-TV report: "FHWA has been working with the New York State DOT and the New York City DOT for nearly a year to correct this unintentional consequence of extending the National Highway System (NHS). At no time has FHWA asked NYCDOT to remove the billboards from Times Square or threatened to withhold federal funds. FHWA and NYSDOT have discussed the possibility of removing the NHS designation from specific roadways, and FHWA stands ready to act if we receive that request from the state."
Times Square was one of the first parts of New York City to be electrified more than a century ago, and quickly became a mecca for brightly-lit signs, starting with signs that used thousands of tiny lightbulbs, and graduating to neon signs and then to today's digital video screens and billboards.
An American in Paris and The Lion King have a major billboard presence because both their theatres are located in the bow tie-shaped plaza formed by the intersection of Broadway and Seventh Avenue. But more than a dozen other shows also have bought billboard space that sometimes towers eight stories or more, alongside even larger ads for everything from banks, stock exchanges and movies to clothing and TV networks. Specialty signage, such as the brightly-lit ball that descends from a post on New Year's Eve, adds to the visual mojo of the square.
CBS quoted City Transportation Commissioner Polly Trottenberg as saying, "The signs in Times Square are wonderful. They’re iconic. They’re not only a global tourist attraction, they’re important to the economy. 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." The Washington Post reported, "The threat to Times Square’s billboards is not the fault of the Obama administration or Transportation Department bureaucrats" and quoted Marc Scribner of the politically conservative Competitive Enterprise Institute as saying the move “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.”
Scribner pinned down the law as the surface transportation reauthorization (MAP-21 Act of 2012), Section 1104, which added arterial roads such as those that pass through Times Square as part of an “enhanced National Highway System" that is subject to the Highway Beautification Act of 1965. That act imposes federal restrictions on outdoor advertisements within 660 feet of the National Highway System.
The Times Square Alliance's website proudly trumpets the digital screens and billboards on its home page.