We have identified three types of issues that impact OAC Program effectiveness. These are:
At the outset of this Assessment we thought the most challenging issues would relate to substantive topics, such as how to deal with new technologies or nonconforming signs. These are indeed tough and important issues. But, the context in which they exist is just as important.
This context includes the attitudes and relationships of various interests and organizational issues at both FHWA and the state Departments of Transportation (state DOTs). Recognizing the attitude and relationship issues and addressing the organizational issues will increase the likelihood that the OAC program can be improved at the Federal and state levels. As the diagram below reflects, the attitude and relationship issues are pervasive. They both underlie and impact the organizational and substantive issues.
Figure 1. OAC Conflict Landscape
In the sections that follow, we describe the most important issues in each of these three categories.
The potential to resolve organizational or substantive issues depends, at least in part, on the willingness of stakeholders to negotiate in good faith and the attitudes and preconceptions they bring to the table. We have identified several issues:
For each, we describe the issue and offer several quotes to provide perspectives from stakeholders.
Fundamental differences in values emerged early in the course of this Assessment. There are those who view outdoor advertising primarily through economic lenses and those who view it primarily through aesthetic lenses. Many people commented on the employment generated by outdoor advertising, the importance of the medium to local businesses, and the current growth of the industry relative to other forms of advertising. Many others commented that billboards are unsightly, that they constitute an imposition on the traveling public, and that regulation should be more stringent and more strictly enforced to preserve vistas. As one person noted, "We've helped the industry create a very profitable marketplace, all in the name of aesthetics. They are protected from uncompensated removal and the marketplace is limited, to their great profit." From another perspective, "It is clear that billboard opponents feel that their aesthetic values are 'correct' and they are willing to impose these values on all citizens." Another added, "There's the perception that OAAA likes the old system and doesn't want any changes. They use the Act as a way to restrict competition."8 And, finally, there are those who offer the ostensibly balanced view, "Both sides have accountability issues - as do the regulators."
Irrespective of the perspectives they represented, many of those with whom we spoke articulated a low level of trust for those they see as being on the "other side." Some of this goes back to the inception of the HBA and its attempt to strike a balance that was acceptable, but not ideal to any side. In addition, the early history of implementation, amendments to the Act, political tactics and tough rhetoric further lessened trust over time. People from both the industry and scenic perspectives told us (not without irony) that the "other side" was extreme in its viewpoints and that they would be loathe to trust them to negotiate in good faith. The trust issue is exacerbated by the disparity in resources. As one person said, "The scenic group fighting the billboard industry is like baby sister fighting Goliath." A similar comment: "There's a very uneasy balance between these two forces - zero sum game is the overall philosophy. Scenics don't have the political power that the industry has." Clearly, for some, there is a real question about whether a useful civil dialogue can occur between representatives of two key interests, the industry and the scenic advocates, when such polarization has developed over the years and trust is low.
Trust is principally an issue between the industry and the scenic interests. At the same time, it is a mistake to characterize all industry as being the same. As one person noted, "The industry is not a monolithic group. There's a big difference between small operators and large corporate entities." One interviewee addressed the trust issue between the scenic interests and industry by flatly stating, "There is often zero trust between the parties." Another said, "Facts are generally not in dispute, it's the perceptions of how each side operates. There is very low trust level between scenic folks and the outdoor advertising industry. But, I believe the state folks are relatively neutral." This more neutral reaction about the agency staff is generally held, although there is clear variability. Some are characterized as inflexible and having a bias against the industry (e.g., "the bureaucratic folks from FHWA") while others are seen as doing a reasonable job without being ideologically opposed to the billboard industry. One person said, "By and large the DOTs are sincere people trying to do their jobs. They don't have a personal agenda. They're trying to do the best they can. They're trying to be fair and reasonable."
In spite of pervasive distrust, particularly between the industry and those with the scenic perspective, people overwhelmingly expressed willingness to engage in a properly-structured collaborative effort, indicating that they would approach the table with caution and suspicion, but with a willingness to try to help change the prevailing dynamics for the better. As one person said, "The context is one of distrust and mythology. We need to build an atmosphere of trust, openness and honesty."
Discouragement and frustration are particularly observable among many of those charged with enforcing OAC. At both the state DOT and the Federal division levels, those responsible for implementing the law frequently cite lack of support from higher levels in their respective organizations, inadequate staffing and monetary resources, inefficient structure and the frequency with which people attempt to "end run" their enforcement efforts by involving legislators and administrators who are politically elected or appointed. One regulator noted, "The Program is so controversial. Whichever stakeholder is offended, the strategy is to go political."
At municipal and county levels, frustrations are similar. Even though local jurisdictions often have standards that are more restrictive than state or Federal requirements, we found practical limitations for a number of local governments. We were told that many jurisdictions lack the resources to effectively deal with the billboard industry in court and that, similar to the situation in many state DOTs, staff responsible for outdoor advertising at local levels of government is often inexperienced and unlikely to have long term continuity in their positions. Commenting on municipal capacity one person noted, "It's really hard to explain to people what the regulations mean and there's little to no enforcement so there's a lot of illegal signage." Another noted, "Locals get lots of challenges about their ordinances and don't have the money to either fight the lawsuits or buy out signs." For most municipalities, staffing of OAC involves only a part of the duties and responsibilities of employees with this assignment. One city official expressed frustration about the city's inability to control signs saying, "It's awful. We would like to be able to control our own image. HBA was passed with a purpose. It was to control aesthetics along the highway. Certainly, it was not intended to limit the city's ability to control its aesthetics."
Organizational issues came up during the Assessment at two levels.9 First the Federal program is considered and then the state DOT programs. Based on input from our interviews, we believe both the Federal and the state programs are operating at substandard levels because of choices made within the respective agencies. These choices reflect priorities and decisions related to organizational structure, staffing and funding. In the case of both the FHWA, at its headquarters and divisional levels, and the state DOTs, most perceive that the agencies do not see outdoor advertising control as integral to their core business.
OAC Program Organization within FHWA
The Outdoor Advertising Control Program is seen by many as a "step-child" programwithin the agency. In our interviews, industry representatives, people with a scenic perspective, employees of various state DOTs and some employees of FHWA itself, noted that OAC is not integral to the FHWA mission.One person commented, "Outdoor advertising control is just not a high political priority relative to highway construction, potholes, or safety. It's a black hat issue. It is not a popular program with the states or with FHWA for that matter." As a result of this "step-child" position, stakeholders observed that within FHWA OAC has received limited resources and organizational support.
Federal OAC Program managers are frequently criticized for their inability to make hard and timely decisions. Some add that they believe the OAC Program is weak and unduly influenced by political pressure. In the words of one, "The biggest problem is that FHWA does not have a backbone." Another stakeholder spoke to FHWA's lack of responsiveness, saying that, "FHWA speaks of a large game but has no intention of really getting into it in that way. Their involvement is minimal, for example, when asked to back or explain their decisions, they don't really do it. They don't know what decisions to make. And, they take forever. They claim that politics precludes them from doing anything. But, it really looks like stonewalling."
Many people, particularly those employed by state DOTs, noted that the involvement of FHWA divisions in OAC is quite variable, but often minimal. This variability, they said, is frequently a function of the interest level of the division administrator or other division employees. This interest level is generally seen as low. Others related their experience that FHWA divisions only become involved when there is a "crisis" and then may or may not have, in their opinion, a deep substantive background in the Program. Divisions often feel caught between the states and FHWA Headquarters and find it difficult to be as responsive as they would like to the state DOTs.
Many people, both within and outside of the outdoor industry, see the need for a stronger and more effective Federal OAC Program. Some see greater centralization as part of the solution while others suggest that devolving the program even further to the states is preferable. As one person noted, "I truly feel that the current regulations are grossly outdated and should be changed. The FHWA should consider relinquishing the control and regulation of advertising devices to the states." Conversely, some feel that the states would not adequately control outdoor advertising without the benefit of an effective Federal OAC Program. Reflecting this view, one person said, "I would advocate getting rid of the HBA except that the state legislatures are beholden to the billboard companies. Therefore, the Federal government is a very important big brother."
Potential Focus Areas
Structure. Address where the OAC Program is located within FHWA to enhance its effectiveness through higher visibility and profile.
Resources. Assure that the resources available to the Federal OAC Program, in terms of both funding and personnel, including the quality and continuity of leadership, are adequate to provide effective control and coordination with the states.
Centralization. Address whether FHWA should centralize its OAC resources and reduce the role of its divisions in OAC implementation. This concept is supported by representatives of some state DOTs and some people from the outdoor industry, but is not widely embraced.
State DOT OAC Program Organization
State DOTs often find the OAC Program to be a difficult fit with the agencies' overall mission or core business. As with FHWA, it is frequently a program that is not embraced by the state transportation agency itself: "The states are the implementers of the law. But, they are not happy about getting stuck with this task." Again, similar to the FHWA, political influence is often cited as playing a role: "DOTs are the primary control factor, for better or worse. In most states a low paid administrator is making important financial decisions. Any denial often leads to a call to an Assemblyman who calls the DOT Director. The implementation of the program is always under attack politically."
Many state programs have been moved several times within the structure of their DOTs and those involved in leading these programs are often not seen as being in key positions within the state DOT hierarchy. A recent survey found that the outdoor advertising control program in state DOTs is housed at various locations including right of way, maintenance, traffic operations, administration and contracts.10 It is also often observed that OAC effectiveness varies widely among the states. We heard a number of examples of OAC programs not receiving the support and resources they need. "States get permit fees, but they are not adequate to cover costs of the program. Those running the program are not in "career-enhancing" positions. It's a no-where position within the DOTs."
The survey cited above reported that outdoor advertising control is often a "collateral duty and the majority indicated they needed more time/staff to address program needs." Some maintain that the shortage of resources reflects the relative unimportance of OAC compared with other state priorities.
Many states think the help and support they receive from FHWA is minimal. A number like it that way but some worry about potential intervention if FHWA perceives a "crisis" or is pushed to become more involved. Most states find coordination and communication with FHWA to be quite limited regarding the OAC Program.
State DOT programs are often strengthened when FHWA shows an interest or places pressure on the states; however, a number of the states do not find FHWA to be a strong partner in implementing the OAC Program. As one stakeholder observed, "There are real concerns with the trust factor between states and the Feds." The relationships between FHWA Divisions and state DOTs are often strained. Addressing the focus areas below might help improve OAC effectiveness.
Potential Focus Areas
Structure. Examine which states have the most effective OAC programs and how the structure of the program within these state DOTs enhances this effectiveness. Determine the extent to which the placement of the Program within the state DOT detracts or enhances its effectiveness.
Coordination with FHWA. Determine how the state DOTs and FHWA can establish more effective partnerships perhaps by identifying the particular characteristics of the exemplar states that demonstrate the best relationships with FHWA or by identifying communication mechanisms that would enhance coordination.
Resources. Explore the correlation between resources and OAC program effectiveness in various states. Determine ways to ensure that adequate resources exist to effectively implement OAC at the state level.
Many substantive issues came up during the Assessment. Substantive issues emerged as major when they were mentioned frequently, elicited strong opinions from various individuals and, in our opinion, hold adequate potential for agreement. A number of other issues, even though important, did not make our list as major.11 Each of the issues below is, based on our various sources of input, a major substantive issue.
Based upon what we heard, the first five substantive issues are judged as the most important and are perceived to have the highest potential for agreement. We have called these the Tier I issues as illustrated in the Table below.
Table A - Illustrative Priority Issues Matrix
The others, or the Tier II issues, are seen as either not quite as important or more challenging in terms of reaching acceptable agreements on how to improve them. In some instances, they are lower on the potential for agreement scale because of the anticipated difficulty in achieving either regulatory or legislative change.12 Each of the substantive issues listed above is discussed in the pages that follow with more detail presented about the Tier I issues.
The Use of New Billboard Technology in Outdoor Advertising
Technological advances are creating more and more friction among people concerned with outdoor advertising. Often, state and Federal regulators feel unprepared to address the challenges posed by new billboard technology. In general, the outdoor advertising industry sees regulators as inhibiting important advancement of the field, while environmental and scenic interests see technology-based signs as further deterioration of the scenic and safety qualities of the highway system. Some background may be helpful.
Historically, the word "billboard" originated because of the practice of posting "bills" on "boards." This may have begun as an alternative to posting them on trees, walls or fences. Over time the "technology" of billboard advertising has evolved in many ways, from the days in which billboards were hand painted, to printed strips of paper, to the use of larger graphics printed on vinyl. Similarly, over time, signs have been lit in various ways, neon was introduced, and various mechanisms made signs moveable.
Today technology is continuing to evolve in the outdoor advertising industry. LED (Light Emitting Diode) technology is becoming increasingly popular in billboard advertising. These signs are visible night and day. Changes in the advertising displayed are initiated by computer.
The HBA and, subsequently, most Federal-state agreements did not anticipate the technological changes now occurring in the outdoor advertising industry. To date, the FHWA has allowed liberal interpretation of these agreements and given the states discretion in their control of these signs (e.g., the frequency of message change).13 FHWA has determined that flashing, intermittent or moving lights to display animated or scrolling advertisements are not permissible, though changeable message signs are allowed. A number of states have addressed the new technologies at least to some degree with many allowing some form of changeable-message technology.
From the industry perspective, new technology signs that are able to convey shorter, multiple or more time-sensitive messages are more cost-effective for advertisers and more lucrative for sign companies. The industry sees these new updated structures as more attractive and effective marketing tools. Currently, these signs are most likely to be found in urban, high traffic areas. The OAAA has recognized and addressed some of the concerns voiced by opponents of new technology signs.14
For many opponents, these signs represent a step in the wrong direction, further diminishing the aesthetics of the highway landscape while posing a safety hazard to the traveling public. While some opponents believe standards could address the major issues, some opponents argue that the debate should be over whether to have such signs at all, not over issues related to brightness or message frequency. Conversely, from an advertising perspective, not allowing LED signs inhibits the logical evolution of advertising technology.
There appears to be interest and a general openness among most parties for some form of national technology standards. State regulators are looking to the Federal government to provide clearer and more comprehensive guidance and, as mentioned, the industry trade group, the OAAA, has adopted standards for its members. It should also be mentioned that for some, developing standards is seen as inappropriate since they oppose the new LED signs in any form.
The distinction between on-premise and off-premise signs is important and potentially confusing. The HBA exempts on-premise signs from its control. Many, if not most, of the signs commonly seen in urban areas are on-premise signs. There is a debate about the line that distinguishes on-premise from off-premise signs. On-premise signs represent a unique challenge to regulators and the industry. These signs are owned and operated by business owners for the exclusive benefit of the establishment on which they are located. On-premise signs cannot be used to advertise goods and services not sold on site. Common examples are signs at the locations of restaurants, motels or gas stations. One of the advantages of LED signs from an advertising perspective is their high visibility. As highly visible on-premise LED signs become more and more common confusion is likely to grow about the distinction between on-premise and off-premise signs and how they are regulated.
"We have not addressed technology at all. It's just not in the law. FHWA has some opinion letters, but there is no real action to date."
"The FHWA and the states are now caught with people playing incredible games to do what they want and stay within compliance. We don't even know how to regulate. The signs are like a huge flat-screen TV. We don't have good information about the safety implications. The rules are built around moving parts and flashing lights. Now it's much different."
"I would regulate electronic moving billboards so they aren't at major intersections. Or that they don't show too many messages. Trivision could be regulated safely.15 Avoid inundation that constitutes distraction. Regulate it so it's consistent across the country. We should anticipate more technological changes, such as electronic chips that transmit to Blackberry's."16
"The industry can see multiple ways to inundate the public. But cars are a bullet going down the highway and safety should be the first consideration. The Feds should step up to the plate."
"In the last five years, digital signage is becoming cost effective. When the three big companies adopt a new technology, it will happen across the industry."
"We have ancient laws and regulations and the technology is way out ahead of us."
"The line between on premise and off premise signs is increasingly vague with electronic signs."
"Billboards by their nature are changeable displays. Digital is a natural evolution."
Potential Focus Areas
Safety. Arguably, new high technology signs are safer for employees in the outdoor advertising industry since they are programmable by remote computer and do not involve the physical changing of advertising copy on billboards. And, arguably, changeable LED signs constitute an increased safety risk to the traveling public since the level of distraction is probably higher. The challenge is to understand the safety impact of LED signs for the traveling public.
Standards. Aspects ripe for consistent regulation include brightness, minimum spacing, message cycle times and location.
On-Premise Signs. Regulators should consider whether or not changeable message signs that are on-premise, but have the potential to distract motorists using a Federal highway, should be subject to Federal regulation. They currently may be subject to state regulation.
Abuses of Signage in Commercial and industrial Areas
The intent of the HBA was to limit, not prohibit outdoor advertising. To this end, billboards were limited to areas that were commercial and industrial by zoning or use. Other areas, such as rural landscapes, were to be protected from outdoor advertising. In conducting this Assessment we heard widespread agreement that billboards should be limited to legitimate commercial and industrial areas only. In addition, there was broad consensus that there are landscapes where billboards clearly do not belong. Nevertheless, abuses have occurred.
Numerous examples were reported where zoning decisions were made for the specific purpose of allowing the permitting of billboards. This practice is referred to as "sham zoning." Another example is when "sham" businesses were established in unzoned commercial or industrial areas and used as justification for sign permitting. Both of these tactics are circumventions of the HBA and receive little support from those we interviewed. Most believe that stronger regulations and/or enforcement would help remedy this problem.
In addition, there are certain "gray area" circumstances that do not constitute outright violations of the HBA but represent situations where the intention of the Act was thwarted. One such circumstance occurs when commercial and industrial zoning is established and billboards are erected long before commercial development occurs. Another gray area occurs when a legitimate business that was used as a basis for permitting a billboard goes out of business after the billboard is erected, but the billboard operation then continues as a legal enterprise.
Many point to the irony that once a billboard is built, whether or not it was erected for a "sham" business or in a "sham" zone, it is difficult and time-consuming to have it removed. During the time when its legitimacy is being contested, the billboard is likely to produce revenue well in excess of the appeal costs or fines that may eventually be imposed. In general, larger billboard companies assert that it is "mom and pop" or "renegade" businesses - with the former lacking knowledge of regulatory constraints and the latter stretching the boundaries of what might be legally acceptable -- that try to take advantage of "sham zoning" or intentionally create "sham businesses" in order to erect billboards.
There was widespread support for improved enforcement actions against "sham" businesses. While some suggested establishing more stringent standards for qualification as a legitimate business, others suggested increased surveillance and field enforcement activities. Many thought that more aggressive enforcement would dramatically curtail problems with sham businesses although they recognize several of the problems with effective enforcement such as lack of adequate numbers of personnel or lack of funding for enforcement activities.
While the specific positions varied, there was broad recognition of the legitimate role of Federal and state regulation regarding the location of billboards. There was also recognition on the part of the industry that there are landscapes of sufficient aesthetic value or where visual impacts would be significant enough to justify the prohibition of billboards in such locations. In addition, a number of interviewees thought that commercial and industrial zoning alone was insufficient justification for billboard construction.
Some find regulations that require specific criteria to justify a business as providing a menu or checklist for those who want to push the limits of the regulations. A few of these individuals advocated totally different approaches, such as real estate or marketing appraisals, to determine the legitimacy of business operations.
Some also see a need to remove signs when a sham business site is no longer used for commercial or industrial purposes. There are those who think that if there were a strict approach for sign removal when a business no longer existed, the practice of creating sham businesses would largely disappear. Currently, if the sham business ceases to exist, the sign, which had been legally erected, becomes nonconforming. The current risk/reward system encourages efforts by some to stretch the legal interpretation of the law because the long-term gains can be so profitable.
"The HBA allows signs in 'unzoned' areas. One small business pops up and then it becomes the basis for eight billboards to be erected. It's an enormous loophole."
"We need to get aggressive about removing billboards in unzoned rural areas. They clearly should not be there."
"We need to address zoning as a prerequisite to allow billboard construction. It is a false assumption that zoning corresponds with use of the property. It is often true in urban areas, but not in rural areas."
"The Federal law is so goofy. It made some assumptions that were just not right. It assumed that signs could only be in commercial or industrial areas -- a poor assumption. Zoning might lead actual land use by years and years, and then billboards can be erected regardless of the actual underlying land use."
"Zoning trends are moving in directions never anticipated."
Potential Focus Areas
Enforcement. The challenge is to have stronger enforcement that does not allow billboards to be permitted in areas improperly zoned or where "sham" businesses exist. From a regulatory perspective, this burden largely falls on the OAC program within the state DOT. Part of the challenge here is the limited state resources devoted to surveillance activities and the willingness of the states to actively pursue timely and aggressive enforcement action. There are other informal opportunities that might be pursued in which the industry can also help self- regulate these practices.
Criteria. While the criteria approach used by many states to determine whether a business qualifies as a legitimate business enterprise creates certain problems in that it provides minimum guidelines for those who want to push the legal boundaries, a practical challenge remains in strengthening, communicating and enforcing these standards. Future deliberations might help update and improve unzoned commercial and industrial criteria.
Consequences. When a billboard is erected using a "sham" business as justification, the billboard company should not gain from this practice. Consideration should be give to having regulations appropriately penalize those who attempt to gain an economic advantage from the use of "sham" businesses as the justification for billboard permitting. Only when the economic costs to using "sham" businesses outweighs the economic advantage is the practice likely to cease.
The Future of Nonconforming Signs
Nonconforming signs might well be the most pervasive issue mentioned during the Assessment. This is an issue that generates considerable discussion, ranging from concerns that the intent of the Act has not been met to equally strong views that these signs are legal and should not be acquired "for free" through approaches such as amortization.17 Beyond these broad views, there are many specific concerns and some interesting opportunities.
The enactment of the HBA created a number of legal, nonconforming signs across the country. These signs, which were erected legally but made nonconforming by not complying with the new HBA standards, could be maintained at levels established by the states consistent with the HBA. Many people assumed that these signs would come down over time as they deteriorated, were destroyed or were purchased by the states with Federal financial support. This assumption, that natural attrition or active removal would eventually eliminate nonconforming signs, has not been realized.
In addition, changing state laws and regulations have contributed to a substantial increase in the number of legal, nonconforming signs. A common example is when a state changes its requirements and mandates increased distances between signs. Such an action dramatically increases the number of legal but nonconforming signs.
The HBA requires states to remove nonconforming billboards if Federal funds are available for acquisition. In the early years after the Act was passed and the states signed their Federal-state agreements, Federal funds were made available to the states and the removal of nonconforming signs was pursued aggressively. However, Congress stopped appropriating such funds after 1981 and enforcement of this part of the OAC changed significantly. In 1991, the HBA was amended to allow funding for removal of billboards with transportation and highway funds allocated to the states. Then, in 1992, the HBA was amended to clarify that the purchase of nonconforming billboards for removal was discretionary on the part of the states. A most basic question related to the remaining legal but nonconforming signs is whether they should be intentionally removed or reduced in number and, if so, how should this be accomplished?
While billboard owners may not enlarge or improve legal, nonconforming signs, they may engage in customary maintenance and repairs. Many states have fairly liberal definitions of customary maintenance that essentially allow a total refurbishing of a billboard in a two-year period. The industry considers its inventory of legal, nonconforming signs a valuable asset and is committed to maintaining these signs. If the intention is to reduce the number of nonconforming signs, a trade-and-upgrade program, not currently permitted by law, may be worth considering. We heard a willingness to upgrade for aesthetics or to relocate some nonconforming signs to better advertising locations in exchange for a reduction in number. Without either new Federal appropriations for sign removal or a significant trade-and-upgrade program, many of these signs are expected to exist far into the future.
For those opposing billboards, the continued presence of nonconforming signs is a disappointment and frustration. Among many scenic and environmental interests, there is a strong desire for nonconforming signs to come down. Some continue to advocate amortization as a means to accomplish this, but widespread use of this approach was effectively prohibited by Federal legislation. The second level of concern relates to maintenance and the ability of a company to rebuild a sign after it is destroyed by some natural act. This became a lightning rod issue when recent hurricanes destroyed a number of signs, which were then rebuilt even though they had been effectively destroyed.
The options for actively reducing the total inventory of nonconforming signs are limited by the fact that Congress has stopped allocating funds for this purpose. While states may use other sources, including Transportation Enhancement Funds for sign removal, virtually all states allocate these funds to other higher priorities. Some see increased, dedicated funding as one of the few ways that the nonconforming sign inventory might be notably reduced. Others believe the likelihood of having any funding dedicated for the removal of nonconforming signs is a remote possibility.
Creative alternatives, such as trading mechanisms or relocation of signs, have been proposed as a means of removing some nonconforming signs, but few of these experiments have been conducted.
Few states seek to actively remove nonconforming signs today unless they are faced with right-of-way expansion. Under current HBA laws and regulations, nonconforming signs cannot be moved to another nonconforming location, so they must be purchased. There are those who advocate having more flexibility for how or when signs are acquired. For example, when a right-of-way expansion conflicts with the location of a nonconforming sign the state is faced with only one alternative: buy the sign. Some feel it would be a wiser and more cost-effective course to allow the states some flexibility (e.g., move the sign, but continue to have it in roughly the same location). Others, of course, find right-of-way expansion as the most effective means to remove nonconforming signs and would see additional flexibility as a move in the wrong direction.
"About 50 percent of the signs in my state are nonconforming. We face a number of challenges: dealing with storm damage, the allowance for maintenance, how to remove them and facing local government issues about removing them."
"I would like to see two types of nonconforming billboards. One would be a board that would have no protection in the event of a storm or a highway widening. The other might be one that conforms to the basic Federal guidelines, but might not meet strict height or spacing requirements (and they are in appropriate business and industrial areas). This latter definition would allow boards to be moved or improved."
"We need better national direction for nonconforming signs. There should be recognition that these signs cannot exist in perpetuity. The law was written to allow ordinary maintenance but this was not defined. It would be very helpful if there was a definition of what constitutes 'ordinary maintenance.'"
"Where have things gone wrong? It's in the fundamental assumption that indicated that by 1972 the nonconforming signs would be purchased. It never happened. Over the past 35 years, the bureaucratic folks from FHWA have been operating as though that will happen. It won't. There are signs that are nonconforming that cities and states would like to have addressed. But there is very little money funded for acquisition. The reality is these are valuable assets. Investing in these signs ensures they can be there forever. In the meantime, FHWA allows no changes."
"These things should be given a useful life. We should not work under the assumption that they go on forever. If, in 1972, they had said that anything older than 50 years old would have to come down. We need to establish a time certain for their removal."
"I would rather see the enforcement of the HBA than having some form of trading."
"I would take the position that 95 percent of these nonconforming signs in our state have been illegally maintained."
"Using 'Act of God' as justification to allow rebuilding the signs is moving in the wrong direction."
"States need a clear, straightforward definition of 'destroyed' to avoid litigation."
"Nonconforming signs are, ironically, more valuable because other signs cannot be constructed in the same area."
"There was always the presumption that nonconforming signs were coming down."
Potential Focus Areas
Goal. Clarify whether the goal of removing nonconforming signs over time is realistic and attainable. Determine if nonconforming signs can, for practical purposes, have a limitless lifespan.
Definition. Determine if the definition of "nonconforming" should be updated. Consider, for example, distinguishing between signs that became nonconforming as a result of the HBA and others that have become nonconforming over time as a result of other state legislative action and whether these different categories of nonconforming signs should be regulated differently.
Customary Maintenance. Examine the variability in the definition (at the states' discretion) of what constitutes customary and reasonable maintenance. The definition of maintenance has grown in importance as nonconforming signs have an apparent indefinite life.
Acts of God. Clarify and apply a consistent interpretation of what constitutes "acts of God" that destroy nonconforming signs. There is considerable variability across the country in what constitutes a destroyed sign.
Flexibility. Identify acceptable methods, if any, that the states may use to remove nonconforming signs (e.g., trading programs) or to move or upgrade nonconforming signs and the legal and regulatory changes required to implement these methods.
Funding. Examine if there is potential to obtain additional Federal funding to acquire nonconforming signs over time.
Control of Vegetation around Billboards
Vegetation management is not addressed by the HBA. Nevertheless, it is an issue that causes a great deal of conflict among those concerned about OAC. The extent and nature of the conflict varies enormously in different parts of the country.
In parts of the country where vegetation grows profusely, issues about control of vegetation within the highway right of way and adjacent to billboards arise both before and after billboard construction. Many contend that no vegetation should be cleared in the public right-of-way for the sake of visibility of a new billboard. Some also contend that the state should not allow cutting of vegetation within the right-of-way to preserve the visibility of an existing sign. The outdoor advertising industry regards maintenance of visibility as inherent to the value of a legally-established sign. Numerous states have developed regulations that specify precise parameters in which vegetation control is permitted. In states where, for climate or other reasons, vegetation does not often grow in a way that impedes visibility, control of vegetation around billboards is generally less of an issue.
Some states have addressed vegetation control as a sequencing issue. That is, if vegetation did not preclude visibility of the sign at the time of construction, some believe that same level of visibility should be maintained over time. Most do not believe that a sign should be constructed where existing vegetation precludes visibility.
Examples of illegal vegetation cutting were reported. In some instances, it is reported that the vegetation was not only cut, often with little sensitivity to best management practices, but poisoned as well. This phenomenon raises questions about the level of oversight and enforcement.
In spite of the fact that the topic is not addressed by the HBA, we believe the control of vegetation within the highway right-of-way and adjacent to billboards causes enough conflict in the administration of OAC that it deserves to be addressed along with the other issues we have identified.
"Another big emerging issue is vegetation. And, the ability to allow industry to cut down vegetation in the public right-of-way to allow clear views of the signs."
"We need a rational approach to tree trimming, cutting and replanting. The object is to improve the viewshed of the billboard. The permitting process linked to a permitted board. The Federal government has a role in this because of planting in the right-of-way."
"Vegetation management is a euphemism - it's vegetation vandalism."
"Vegetation can limit . . . visibility causing the value of the advertising to diminish and therefore reducing the effectiveness of the structure for both the operator and advertiser. I am not advocating that outdoor companies should be given carte blanche to clear cut publicly owned ROWs. I do, however, suggest that the 'reasonable' trimming of trees based on a permit process or state review is a perfectly viable request."
Potential Focus Areas
Education. This is an area in which there is an opportunity for the states to benefit from understanding how neighboring states are approaching vegetation control issues.
Federal Role. Consideration should be given to whether there is an appropriate Federal role that clarifies vegetation control in the public right of way to maintain billboard visibility.
Standards. Appropriate standards for vegetation control and landscaping should be reviewed for their consistency and effectiveness. Consideration should be given to whether the standards for vegetation control should vary depending on whether or not the sign is conforming or nonconforming.
Enforcement. When there are clear abuses of vegetation control, timely and strong enforcement actions are needed. This, again, might be an area in which the states can productively learn from one another. Of course, effective enforcement can be largely a function of available resources and the inherent difficulty of observing and apprehending violators.
Inconsistent Regulation and Enforcement
Many people expressed a strong desire to have consistency in OAC regulations and stronger enforcement across and within states. Interestingly, many people also expressed the desire to maintain state flexibility in how the HBA is implemented. These two goals, consistency and flexibility, are inherently in conflict.
The HBA has been characterized as an Act that attempts to strike a balance between setting standards that the states must meet and allowing flexibility in how those standards are met. Nevertheless, inconsistent regulation and enforcement tend to produce inconsistent results.
We often heard about various states employing different interpretations of the Act and therefore having variations in their approach to enforcement. This can create an opportunity for advocates to use these variations as a way to justify a specific approach (e.g., "We don't have to do it that way in X state.").
A number of people we interviewed thought the rules and law were adequate, but that inconsistency in enforcement was the problem. This was particularly true when people spoke about illegal signs or "sham businesses." Of course, inconsistency can be partially attributable to some of the organizational issues cited earlier (e.g., lack of resources and state-by-state enforcement). Part of the enforcement challenge also relates to adequacy of information. Some states are developing very comprehensive and modern approaches to conducting and maintaining their sign inventories. But there is also the perception that consistently-defined, up-to-date data is often not available at the state level and is certainly not available at the national level.
"Most creative solutions would come through focusing on enforcement (bigger fines, reasonable fees)."
"We need to get the regulations up-to-date."
"With a magic wand, I would start with consistent enforcement of what's on the books."
"Industry wants reasonable, but strong regulations with enforcement"
"The win-win scenario to deal with older inventory (like nonconforming signs) is to create more flexibility on the regulatory side. If states, counties, and cities had the ability to work with operators on issues of damage, maintenance, replacement, height adjustment, etc., we believe our industry would be able to assist in implementing new technologies that would ultimately lead to fewer, more effective, aesthetically improved, outdoor advertising units."
Potential Focus Areas
Consistency versus Flexibility in Standards. Certain issues, such as the approach to new technology, are ripe for the development of greater consistency in regulation. The challenge could be to define which issues warrant consistent application across the country and which are appropriate for more flexible interpretation at the state level.
Consistency versus Flexibility within States. At lower levels of government and within state DOTs (such as through district or division offices), there is the same challenge of seeking consistency while maintaining flexibility. Analysis of this issue at the state level combined with new direction and leadership from within the DOTs could improve the consistency and flexibility balance within states.
Enforcement. Many believe that stronger state and Federal enforcement would address many of the inconsistencies associated with the implementation of the OAC program. This belief should be analyzed.
Inventory. Consider a national inventory of signs subject to the HBA with consistent definitions so that the status of various enforcement and other issues can be more easily monitored over time.
The Bonus Program
The initial national attempt to control outdoor advertising was enacted in the Federal-Aid Highway Act of 1958. Section 122 of the Act was called the "Bonus Act." It provided that states which voluntarily agreed to control outdoor advertising adjacent to Interstate Highways in accordance with national standards would receive a bonus payment of one-half of one percent of the cost of interstate highway construction projects.
The HBA did not eliminate the provisions of the Bonus Program and 23 states continue to operate under both the Bonus Program and the OAC.18 A variety of people raised the question about the value of continuing to have the Bonus Program along with the HBA. No bonus payment has been made since the early 1980s.19 Under the bonus agreements signed prior to 1965, the states promised to pay back all Federal bonus payments if the state failed to maintain control as required by the Bonus Act.
At the same time, some believe that the Bonus Act has been more effective than the subsequent HBA in controlling outdoor advertising. Those with this perspective think that amending and making the Bonus Act mandatory would have been preferable to the passage of the 1965 HBA.
"We tried to draft regulations that made sense of the HBA and the Bonus Act requirements and finally decided that there was no way to do it. We have not found a model from other states that would coordinate the Bonus and HBA requirements."
"We ought to remove the Bonus State provisions. It has not been used in years. States would like to opt out of the program, but current policy is that states will need to repay previously received bonus payments."
"The Bonus Program effectively died in 1982."
"Provide a uniform system of sign control. Eliminate conflicting elements of the Federal-Aid Highway Act of 1958 . . . and the Highway Beautification Act of 1965 by merging these two regulatory frameworks."
"This archaic law has exactly the opposite effect of what it was intended to achieve. The Bonus Act results in "clusters" of billboards on small tracts of land that were zoned commercial or industrial in 1959."
Potential Focus Areas
Eliminate the Bonus Program. Some desire a uniform system of sign control and find the HBA and the Bonus Program to be in conflict. At the same time, there are those who believe that the Bonus Program, while voluntary, was effective and should be maintained. The value of the Bonus Program should be examined and a conscious decision to eliminate or reinforce the Program should be made.
Adjustment of the Bonus Program. Consider turning the Bonus Program back to the states allowing them to continue, modify or abandon the program as they desire.
Past Payments and Future Obligations. There are issues related to past payments and the extent to which the states would need to repay the Federal government for Bonus payments if the states were to individually opt out of the program or the program were to be turned back to the states. Currently, although no bonuses have been paid for years, failure to comply with Bonus Act requirements places the Bonus States in jeopardy of having to repay bonuses that have been paid in the past.
FHWA's 10% Penalty
All states must comply with the effective control requirements of the HBA or be subject to a ten percent reduction in their Federal-aid highway apportionments. The penalty has been used, but seldom.20 It is such a draconian measure for FHWA to take that it is politically difficult to use. It is as if the penalty hammer is so large that it cannot be lifted. Some do not like having FHWA use it as a threat against them. Others believe FHWA only threatens instead of taking action when needed. Still others believe that if the threat were removed, FHWA would lose much of its enforcement capability.
"FHWA only threatens to use the penalty if there is systemic inability to abide by the statute. Sloppy enforcement alone won't do it. It takes a long history of abuse and months and months to administer. A more flexible sanction package might result in more effective enforcement."
"The 10% threat of withholding gives an excuse for the Federal program."
"The HBA is a hostage law that allows the Feds to control things through funding, although the 10% penalty has never happened. They don't want to take the money from their programs which build highways because that's what they're about, building highways. They don't have a .22 or a 30-06 rifle as the 'stick.' They only have the atomic bomb: the 10% of funds."
"There's a lot of distance between no action and ten percent penalty."
Potential Focus Areas
The Nature of the FHWA 10% Penalty. Consider the effectiveness of the 10% Penalty and whether new or different FHWA enforcement mechanisms are more appropriate.
Increased Penalty Discretion. The penalty is so severe that it is little used. Consider the possibility of "right sizing" possible FHWA financial penalties so that the threat is commensurate with the violation.
Alternative Penalty Approaches. A wide variety of alternative penalty or reward approaches is possible. For example, it has been suggested that the use of Federal-aid highway funds be prohibited on segments of roads where there are nonconforming signs.
Most Federal-state agreements are 30 to 40 years old and many have elements that are outdated or are in conflict with subsequent state laws.
Several state OAC employees told us that their legislative bodies had passed laws that are overtly or subtly in conflict with the HBA. This obviously makes enforcement difficult as state regulators try to determine what actions to take or not take.
Various Federal-state agreements suffer from outdated elements. The advent of high technology signs and the evolution of freeway on-ramp design (that may make signs nonconforming) are examples of challenges that may not be adequately addressed in a state's existing Federal-state agreement. Several states expressed concern about their agreements being inconsistent with new technologies.21
"It's a good idea to update the Federal-state Agreements. FHWA could write a rule that would provide the floor about spacing of signs and so on, and could thus get a minimum common denominator across all states."
"The Feds ought to be in the minimum standards business."
"Each state is bound to their Federal-state agreement and those agreements are obsolete. Now there is no guidance from the Feds about how to effectively control the new technologies. The rules are very different between states. Interstates should be regulated uniformly."
Potential Focus Areas
Procedures. The process for updating agreements is perceived by many to be exceedingly onerous. There might be ways in which FHWA could facilitate the updating of these agreements recognizing administrative procedure requirements, but being as accommodating as possible to those states that wish to update their Federal-state agreements. Updating a standard agreement might be a good candidate for a pilot project.
Minimum Standards. Identify minimum standards that must be in all Federal-state agreements and update agreements as needed.
Dated Provisions. Provisions that are in conflict with today's reality or other state legislation should be reviewed. Many of the original agreements, for instance, are either silent about or in conflict with the new technologies being used in some signs.
Contradictions. Some states have passed legislation that contradicts their original Federal-state agreements. Developing a national inventory or even a sampling of such contradictions might be a useful first step in updating agreements.
HBA Scope: Responsibility for the Federal Aid Primary System
When the Intermodal Surface Transportation Efficiency Act (ISTEA) was passed in 1991, it made several changes to the HBA. For purposes of the HBA, states are required to control signs along any highway that was part of the Federal Aid Primary system as of June 1, 1991, regardless of subsequent changes in classification. 22 This is frequently referred to as the 6/1/91 problem.
Many states find this to be an annoyance with little justification. They now manage certain roads for one purpose and one purpose only: outdoor advertising control. A number of state managers we interviewed suggested that it would be appropriate to drop the state's responsibility, which would then reside with the appropriate unit of local government. Many states feel their resources are already stretched in managing the OAC program. Lessening the state's responsibility as suggested might allow them to operate their remaining OAC programs in a more focused and effective manner. A change such as this would require legislative action.
There are some, however, who express concern that not having the states continue to have this responsibility will lead to more signage and less control.
"The states should not have responsibility for primary routes that are no longer as part of the national system. We have responsibility for only OAC. It's an annoyance."
"Eliminate the requirement that states retain sign control along any highway on the Federal Aid Primary system as of June 1, 1991, regardless of any subsequent change in its functional classification. Highways that are dropped from the system should be dropped from enforcement after first providing notification to the succeeding local unit of government. . . . As a practical matter, state DOTs do not have people assigned to such highways to assist in detection and enforcement activities."
"We need to bring this program into the 21st century. We need to critically evaluate our original paradigms. There is still a need for control to help aesthetics and safety. But, we need to be clear about our interests - does it still include the old primary system? Why not just be responsible for the interstate system and the scenic byways?"
Potential Focus Areas
As we conducted interviews, a continuum of importance of issues became clear. We then began to explore the potential for gaining agreement about how the issues should or could be addressed collaboratively. By merging the dimensions -- perceived importance and potential to reach agreement -- a matrix was created.
Table B shows the major issues distributed along these two axes. We find it particularly revealing that, in our estimation, none of the issues, regardless of importance, can be placed in the highest row for potential for agreement. We arrived at these placement conclusions initially through the comments we received in the early interviews and subsequently by testing our judgments about issue placement with various individuals we interviewed and in the focus group discussions, and then with members of the ARG.
The issues having the most promise - because of both importance and potential to reach agreement - are highlighted in light gray in the table. These Tier I issues should be pursued first in any form of collaborative process. Again, it is revealing that no issues made the top row as having great potential for agreement. The remaining issues - i.e., Tier II - could be tackled after success has been achieved in addressing some or all of the Tier I issues.
The optimal approaches to pursuing these issues will vary depending on the nature of the issue, the extent of conflict, and the value in having balanced and representative interests as part of a collaborative process. The following section outlines several options for moving forward.
Table B - Priority Substantive and Organizational Issues Matrix
8 OAAA is the Outdoor Advertising Association of America.
9 There is, of course, a third level -- local jurisdictions. As might be expected, these jurisdictions control outdoor advertising in many ways with great variability across the country. Generally, local government ordinances may be more restrictive than state and Federal regulations.
10 Clyde Johnson conducted this survey; he was formerly with FHWA and is currently employed by TBE Group.
11Substantive issues that are not defined on our list as "major" include: variability in the quality of billboard inventories in different states, traffic safety, on-premise versus off-premise definitions, scenic byways and segmentation, advertisement copy and content, perceptions about the original intent of the Act, the removal of illegal signs, adequacy of permitting fees, taxes on billboards, valuation practices, amortization, just compensation, condemnation and right-of-way expansion, profitability of the industry, consolidation of the industry, the economic impact of outdoor advertising, signage for small rural enterprises, logo signs, TOD signs, specifics about lighting, spacing and size, Indian lands, and outright bans on billboards.
12 Even though some issues would appear to require legislative change for resolution, administrative discretion may be available. As one person noted, "There's great untapped potential for dispute resolution in HBA. Section 131 allows the Secretary to suspend provisions of the Act when he finds it in the 'public interest.' There's broad discretion - both an opportunity and a burden." The extent of Secretary discretion, if any, to address these issues is beyond the scope of this Assessment.
13 A July 1996 FHWA memorandum stated in part: "FHWA will concur with a State that can reasonably interpret the State/Federal agreement to allow changeable message signs if such interpretation is consistent with State law. The frequency of message change and limitation in spacing for these signs should be determined by the State. This interpretation is limited to conforming signs . . ."
14 The Outdoor Advertising Association of America (OAAA) updated its Code of Industry Principles in 2006 regarding digital billboards, adding: "We are committed to ensuring that the commercial and noncommercial messages disseminated on standard-size digital billboards will be static messages and the content shall not include animated, flashing, scrolling intermittent or full-motion video elements (outside entertainment areas). We are committed to ensuring that the ambient light conditions associated with standard-size digital billboards are monitored by a light sensing device at all times and that display brightness will be appropriately adjusted as ambient light levels change."
15 Trivision signs are signs that allow three messages to be shown consecutively by mechanical means.
16 A Blackberry is an example of the many electronic devices currently available to consumers.
17 Amortization would involve giving the nonconforming sign a specified period of time to exist before it must be removed without cash compensation; that is, the revenue generated by the sign over a specified period of time is assumed by the regulatory agency to compensate for the loss of the sign and the cost of the sign removal.
18 Bonus Act states include California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
19 Bonus payments were made through general fund appropriations and were not appropriated from the Highway Trust Fund.
20 Secretary of Transportation Volpe did invoke the ten percent penalty after determining that South Dakota was not providing "effective control" after the state zoned most of the area along Interstate 90 as commercial. Subsequently, the withheld federal-aid highway funds were returned to the state. Other states have similarly been penalized with funds returned after compliance was achieved.
21 For example, Utah's agreement states that signs that have intermittent lights are prohibited, except for public service information.
22 Congress also indicated that states could use Highway Trust Fund monies to acquire nonconforming signs. With this in mind, the FHWA actively pursued the removal of nonconforming signs. However, Congress amended the HBA so that the decision to remove nonconforming billboards was up to the discretion of the states.