Electronic Message Centers: Safe and Legal

The federal government recognizes the superior communication value of EMCs and uses electronic information panels on many freeways to warn drivers of possible hazards. Its use of portable electronic warning signs at construction or accident sites is also increasing.

The sophisticated hardware that is now available makes maximum readability possible for the driver. Airports and highway departments are developing expertise in positioning and sizing of these signs to enable the driver to read, react and move through traffic with optimum safety.

Electronic message centers are not a distraction to drivers; it is quite the contrary. Their exceptional readability and conspicuity means that EMCs actually increase driver safety. The federal government and other reviewers, after conducting numerous studies, analyzing court cases, and reviewing the available literature, have concluded that signs and electronic message centers, if used properly, are traffic safety enhancement devices.

The 1958 Federal-Aid Highway Act established federal controls for signs illuminated by flashing, moving or intermittent light. The Federal-Aid Highway 1965 Act did not contain any reference to lighting controls. However, Federal/State agreements were entered into with all States referencing lighting restrictions on signs in commercial or industrial areas, based on customary usage.

In 1978, the Surface Transportation Assistance Act amended the highway beautification law to allow on-premise electronic message centers along the Interstate and Federal Aid Primary road systems, subject to individual state law, so long as those signs do not contain flashing, intermittent, or moving lights. Variable message signs, whose content can be changed or altered on a fixed display surface, are recognized by the federal government as different from the regulated animated signage, which mimic movement or have high-intensity flashing lights in order to grab the viewer's attention.

In a 1980 study commissioned by the Federal Highway Administration, researchers Ross Netherton and Jerry Wachtel set out to prove electronic variable message signs were unsafe. They concluded, however, that no credible statistical evidence existed to support the conclusion that electronic or variable message centers negatively impacted road safety. Their report also said that roadside signs provided a stimulus that helped maintain driver alertness, and increased safety by combating "highway hypnosis."

Several states have conducted studies on the safety of roadside signs, including EMCs, and none have found an increase in traffic accidents - and in some cases found a significant decrease in accidents - related to the signs. Furthermore, nine leading insurance companies were surveyed, and all indicated that they had never received an accident claim involving an advertising sign.

Richard Schwab, former Federal Highway Administration program manager for research on highway visibility and night driving safety and Fellow of the Illuminating Engineering Society of North America, conducted an extensive study that concluded EMCs could not be linked to traffic accidents or any reduction in traffic safety.

In 1996, the Kentucky Supreme Court struck down a state statute that prohibited signs near highways if they contained or included "flashing, moving or intermittent lights except those displaying time, date, temperature or weather …." The court said the state had failed to demonstrate that a legitimate government interest was advanced by the prohibition, and said no evidence supported the notion that so limiting the content on the display had "anything to do with highway safety or aesthetics."

It is a testament to the safety of EMCs that, since 1979, the Federal Highway Administration has not seen any need to revise its recognition of the legality of on-premise commercial variable electronic message signage, provided that:

1. the displays are changed at reasonable intervals,
2. the signage does not violate the compliance agreement's definition of flashing lights, and
3. a state has accepted local controls in lieu of state controls and such signs are considered to have been in customary use within the locality, or a state court has determined that such signs do not constitute flashing, intermittent or moving lights.

Legal Rights Question:

How do the First and Fourteenth Amendments affect regulation of my business sign?

To answer this question, we'll briefly review the protections provided by the Amendments:

The First Amendment - see next
The Fourteenth Amendment

The First Amendment:

The First Amendment contains guarantees for some of our most basic freedoms, including freedom of speech and assembly, freedom of the press, and freedom of religious expression.

The U.S. Supreme Court has ruled that the Fourteenth Amendment to the Constitution (see below) makes the First Amendment's federal constitutional guarantees enforceable against actions of state and local government. Thus, a local government's sign code must comply with the First Amendment's guarantee of freedom of expression because signs, including a business sign that does nothing more than identify a business or advertise a product, are a constitutionally protected form of expression.

The most critical legal issue raised by a sign code is whether it regulates signs based on their content. While it is not unconstitutional per se for a sign code to regulate signs based on their content, courts evaluate "content-based" regulations under a demanding test known as "strict scrutiny." Under the strict scrutiny test, a content-based sign regulation will be upheld only if it is justified by a compelling governmental interest, and is "narrowly-tailored" to achieve that interest.

The Problem with Content-Based Regulations

All sign codes contain "content-neutral" provisions that define signs by their structure or location, e.g., wall-sign, pole-sign, roof-sign, and then impose regulations on the signs that meet those definitions. Some sign codes, however, also contain regulatory provisions that define signs by their use, e.g. "identification sign," "information sign." Since the only way to determine whether a particular sign falls within the definition is to analyze the content of the message on the sign, these "use definitions" are "content-based" regulations. In other words, the content of a business sign then determines whether it is allowable for display.
The problem with "use definitions" in a sign code is that such codes often contain regulations that limit the content of the message on a business sign. For example, in a recent federal case that struck down a code with these kinds of provisions, the court noted that a "directional sign" in front of a business could contain words such as "Enter Here" or "Entrance," but could not display the McDonald's "Golden Arches" logo or the words "Honda Service." The court also cited the fact that the local government had interpreted another "content-based" provision of the code to prohibit a Dodge dealership from displaying on its sign a corporate logo that designated it met the manufacturer's "Five-Star" quality standard for repair service. (See the case North Olmsted Chamber of Commerce, et al v. City of North Olmsted, 86 F.Supp.2d 755 (N.D. Ohio 2000), in the Legal Resources section.)

The bottom line: While sign codes may lawfully regulate the size, height, location, and other "physical" characteristics of business signs, regulations that define business signs by reference to their content - the message they display -- are legally suspect and may be unlawful intrusions on the business owner's constitutional rights.

The Fourteenth Amendment:

As stated above, the U.S. Supreme Court has ruled that the Fourteenth Amendment to the Constitution makes the federal constitutional guarantees contained therein enforceable against actions of state and local government. In regards on-premise signage regulation, the protection provided by the Fourteenth Amendment commonly enters the picture at the sign permit application counter.

In order to pass constitutional muster, the permitting, licensing, conditional use or variance request procedure must, at minimum, be structured to assure easy understanding of objectively based requirements. In addition, reasonable application fees, speedy decision on the application by the permitting authority, and recourse to automatic and swift appeal of any denial must be provided. A failure to provide any one of these minimum procedural requirements can give rise to a claim that the process violates the due process clause of the Fourteenth Amendment.

Because a sign is essential to communicating a business's presence and effectively competing in the marketplace, in some circumstances, a failure to provide minimum due process can raise a "prior restraint" issue. A prior restraint occurs when the right to communicate is subject to the prior discretionary approval of a government official that may be exercised to censor speech.

To the degree that government regulatory decisions affecting signs are not based solely on objective, quantitative criteria, the prior restraint issue is always potentially present in the sign permitting process. This potential makes it incumbent upon the official to act pursuant to clearly defined standards that:

1. strictly limit the official's discretion, and
2. guarantee resolution of application issues within a short period of time.

Failure to provide these standards may render the code unenforceable.

Legal Decisions cited by US SBA on their website www.sba.gov

CASE:

North Olmsted Chamber of Commerce v. City of North Olmsted, 86 F.Supp2d 744 (N.D. Ohio 2000)

HELD:

Equal protection is violated where a law distinguishes between and classifies speakers in a manner that affects fundamental rights protected by the First Amendment. Note: As one example of the city's conduct in this case, the city, citing "safety and aesthetic" reasons, banned certain free-standing pole signs, mostly on-premise business signs, while exempting others, notably public signs of similar construction. At p. 779, the court states, "It is beyond reason to think that the signs of public or semi-public entities are inherently safer or more aesthetically pleasing than the signs of business entities, or that the sign of a local service organization is safer or more beautiful than that of a private or international organization." Comment: Judicial standards for determining violations of substantive due process and equal protection are frequently interchangeable and equivalent.

CASE:

Revisiting North Olmsted, supra

HELD:

The federal district court in North Olmsted, in a well reasoned and written opinion, discussed and addressed all of the issues raised above. Then, in a sweeping decision, the court held that the city's ordinance constituted an impermissible and unconstitutional restriction on noncommercial speech for the following reasons: 1.       The selective prohibition on pole signs created an impermissible content-based distinction; 2.       The equal protection clause was violated because speech was allowed to some speakers, but not to others; 3.       The permitting scheme gave unfettered discretion to the permitting official, constituting an impermissible system of prior restraint; 4.       The content-based regulation affected both commercial and noncommercial speech, whether reviewed under strict or intermediate scrutiny, and was therefore invalid in its entirety. Because the city had violated the plaintiffs' civil rights under section 1983 of the Civil Rights Act, the city was ordered to pay plaintiffs' attorneys' fees of approximately $200,000.

Prior Restraint Issues
The interplay between the First and Fourteenth Amendments and police power often gives rise to corollary issues. One such issue may be defined as a prior restraint. Generally, a prior restraint occurs when the right to do something is contingent upon the prior discretionary approval of a government official. In signage-related issues, the question of prior restraint will appear during the application process to acquire a sign permit. In this process, the prior restraint issue is always potentially present, for the right to communicate through signage is universally dependent upon obtaining requisite permits.

CASE:	Southwestern Promotions Ltd. v. Conrad, 420 U.S. 546 (1975)
HELD:	A system of prior restraints exists when speech is conditioned upon the prior approval of public officials that may work to inhibit or suppress communication before it reaches the public. While prior restraints are not necessarily unconstitutional per se, any such system...bears a heavy presumption against its constitutional validity.

CASE:	FW/PBS v. Dallas, 493 U.S. 215, 225-26 (1990)
HELD:	Two evils will not be tolerated in any system of prior restraint: 1.                               A scheme that places unbridled discretion in the hands of a government official or agency the result of which may be censorship; and 2.                               A scheme that fails to place time limits on the time within which the decision maker must issue the license or permit.

CASE:	Forsyth County v. The Nationalist Movement, 505 U.S. 123, 130 (1992) (citing United States v. Grace, 461 U.S. 171, 177 (1983))
HELD:	Any permit scheme controlling time, location or manner of speech must not be based on the content of speech, must be narrowly tailored to serve a significant governmental interest, and must leave open ample alternatives for communication. (Emphases added.)

CASE:	Desert Outdoor Advertising, Inc. v. City of Moreno Valley, 103 F. 3d 814 (9th Cir. 1996)
HELD:	An impermissible prior restraint exists when an ordinance gives the permitting official discretion to approve or deny a sign permit when the only standards controlling the exercise of his discretionary power are "[the sign] will not have a harmful effect upon the health or welfare of the general public...[and] will not be detrimental to the aesthetic quality of the community."

Features and Advantages of EMCs
Take into account the following when considering an electronic message center for your business:

Advantages:

• EMCs allow an unlimited number of message changes and variable controls, all easily completed with a computer. The result is lower labor cost and elimination of the physical liabilities often associated with copy changes on traditional reader boards.
• EMCs communicate variable messages as people pass by, allowing greater flexibility in communicating to the public.
• With their automated dimming and focusing systems, EMCs can respond to the visibility needs of the public, increasing safety and conspicuity day and night.
• The flexibility offered by EMCs means your business can advertise specials while also displaying public service information or other items of public interest.
• These signs can quickly "brand" your business site in the local community.
• EMCs are an investment in your business and provide the best and most cost-effective forms of paid advertising. The only form of advertising that may be more powerful is word of mouth (although it can be neither purchased nor controlled).
• The effectiveness of an EMC is not limited by space or surface area constraints as with a reader-board.
• EMCs act as your "salesman on the street," attracting new customers to your business location.
• EMCs allow you to market your products and services to your immediate trade area and prevent wasteful advertising expenses.
• The business owner can change the message as needed to provide information to specific retail customers, and can be used for political, social or community events.
• Software is available that enables a business owner to display sophisticated logos or images on the EMC precisely as planned.

In summary... Although they may require a greater initial investment, electronic message centers offer many different advantages for the business owner to consider. Be sure to review the Frequently Asked Questions about EMCs for additional information about the cost-effectiveness of your investment in an EMC.

An Answer to the Challenge of Changing Demographics

The public - your existing and potential customers - is on the move, both literally and figuratively, and sometimes catching their attention is like hitting a moving target. Consider that approximately 18.6% of Americans move every year. Whether they move a short or long distance, they usually change their basic trade area. Add to that the fact that 15-35% of the traffic on a given street is "just passing through" (vacation travelers and such), and you can see the great potential for single stops by those unfamiliar with the area.

An electronic or variable message center offers a unique way to capture the attention of these passers-by. An EMC allows you to communicate more effectively with the typical person passing by at a particular time day by changing the message and graphic of your sign to match the profile on the street.

The local airport in Monmouth, NJ offers a clever example of this flexibility. The airport used its display to advertise price specials at peak hours to those traveling by on the freeway on the way to and from work. During shopping hours or after-school traffic, the airport changed its display to offer community service messages.

This kind of flexibility increases the readership of a message unit, as it can correspond to the traffic profile by the day of the week, the time of day, or the season. With the right software, virtually any message can be created and displayed.

The demand by businesses for these electronic or variable message centers is increasing because these signs improve the economic viability of difficult commercial sites with limited space. Municipalities that wish to prevent urban sprawl or deterioration of urban land are passing enabling acts that require optimization of urban space, and thus are more willing to look at EMCs as a signage option for businesses.

Frequently Asked Questions about EMCs

For easiest navigation, the following questions about EMCs are also links to their location and answer on this page. An answer may also contain a link to additional information on this SBA signage site. After each answer, a link is provided to bring you back to the top of this page.

What are EMCs?
How are message centers used?
We have a sign; why would my business use a message center?
How will an electronic message display work best for my business?
Is an electronic message center a cost-effective advertising medium?
What level of return on investment can I expect?
How much can I expect to spend on an electronic message center?
What about safety? Aren't EMCs a distraction for drivers?
What about face changes? Can I change the face or copy of my sign?

1. What are EMCs?

Electronic variable message centers are computerized programmable electronic visual communication devices. They are capable of storing and displaying multiple messages in dozens of formats and at varying intervals. Similar to reader boards, they allow their owners to change copy frequently, but without the cost of replacing missing or broken letters, and without the physical labor involved in changing copy.

Unlike the traditional reader boards, the message on an EMC can easily be changed throughout the day or week to suit the demographics of the people passing by. This allows the business owner to advertise specials, display public service information, or provide other items of public interest in a manner quickly and easily read by those passing by at any given time. Consequently, the effectiveness of an electronic message center is not limited by the space or surface area constraints that hamper business communication on reader boards.

2. How are message centers used?

Message centers are used by businesses that want the flexibility to control their own graphics and message unit and be able to change their communication to meet their needs and the needs of their customers.

• Large Corporations - have used such devices for years, in forums ranging from sports stadiums to Times Square. They like the ability to advertise their products in a dynamic format in which they can change their messages frequently and easily.
• State Highway Departments have also realized the value of electronic message centers, and are increasingly using them to inform and direct traffic in large metropolitan areas, thereby easing traffic congestion and increasing traffic safety. Large-scale urban studies are currently being done to expand message center use in this area, with other "intelligent" components, to create integrated intelligent transportation systems. Under the Manual on Uniform Traffic Control Devices (MUTCD), they are used for regulatory, warning, and guidance purposes related to traffic control.
• Local Banks have for years used the familiar time and temperature units.
• Small Businesses are quickly realizing the advertising power of these dynamic visual communications devices as most people in a community look at the signs frequently. Although EMCs have been quite expensive in the past, often costing around $30,000 or more for a small, simple unit, recent technological breakthroughs have drastically reduced production and operating costs, bringing them within an affordable range.
• Entertainment establishments, restaurants, casinos, and theme parks use EMCs extensively to create a district or zone effect.

3. We have a sign; why does my business need a message center?

Consider for a moment the speed at which traffic passes by the average business. A motorist has only a few seconds to see and comprehend any given sign. For example, on a street with traffic passing at 45 miles per hour, a car that is 500 feet in front of a given sign will have only 7.6 seconds to read the sign before it passes, under normal driving conditions. A business' sign must be conspicuous if it is to catch the attention of passing motorists within the limited amount of time available.

Motorists often spot electronic message centers quickly because the copy changes, the letters are illuminated, and the signs have traditionally been used as public service devices. Additionally, electronic message centers may have greater visibility from further distances, especially in poor lighting conditions, giving the motorist additional time to read the message displayed while safely maneuvering his or her vehicle.

Message Centers act as a consolidating type of advertising. In other words, they offer businesses a way of posting a variety of information in one place rather than relying on numerous signs and banners displayed in windows, for example. This can be a real advantage for a business located in a district with strict rules about temporary signs.

Most importantly, the electronic message center almost always increases a business's share of revenue. This is a result of the "branding" of the site through the use of specific logos, reinforcement of other advertising messages, allowing for public service notices, generating exact impulse stops, and helping to change customers' buying habits once they have stopped.

4. How will an electronic message display work best for my business?

The growth in number of media options in recent years is good news for businesses because of the variety available to meet individual business communication needs. However, each new advertising option draws its audience away from other existing audiences. This is not true with EMCs. The display's audience is determined by the sign's message, its location, and the number of vehicles that pass it each day, and its audience continually grows.

The electronic message display rapidly becomes a landmark in a business's local community, because it offers a valuable public service to the entire community by displaying:

• Public service information
• Civic events
• Personal and holiday greetings
• Current time and temperature
• Specific advertising messages

Passing viewers often look forward to reading clever new messages, and may even come to rely upon the message service in some settings. But most importantly to the business owner, the passing viewers will remember:

• What the business is, and
• Where the business is located.

5. Is an electronic message center a cost-effective advertising medium?

Yes. Businesses often select their advertising medium, and messages, based upon the cost per thousand exposures of their message to the public. ON this basis, no other form of advertising comes close to matching the efficiency and cost-effectiveness, dollar for dollar, of an electronic message display. Compare the figures below:

• Newspaper advertising - the cost on average is about $7.39 for 1000 exposures within a 10-mile radius of the business location.
• Television advertising - The cost on average is approximately $6.26 per 1000 exposures.
• Radio advertising - The cost is about $5.47 per 1000 exposures.
• New LED electronic message center display - The cost is less than $0.15 per 1000 exposures. How? Assume, for example, that you spend $30,000.00 on this type of system, and that its useful life is about ten years. The amortized daily cost of the message center would equal about $2.74. Add to this the daily cost of electricity for this new LED unit (approximately $0.20), thus giving your business a daily message center expense total of $8.82. With a daily traffic count of 20,000 vehicles passing your business, you would have a cost of less than $0.45 per thousand exposures (counting drivers only)!

Best of all, with an electronic message center, a business does not have to worry about missing its target audience, becoming "yesterday's news," or facing expensive production costs for changing its message, as happens frequently with the other forms of advertising mentioned.

With an electronic variable message display:

• The business owns the form of advertising
• The advertising works for the business 24 hours a day, 365 days a year
• The sign acts as the "salesman on the street" attracting customers into the business
• The advertising speaks directly to the potential customers as they drive past the business location, and the EMC makes the business a landmark in its community.

Finally, many message center manufacturers provide leasing programs, which include service and maintenance, thereby providing another option for covering the cost of usage.

What level of return on investment can I expect?

For businesses that choose to enhance their signage with an electronic message display, the owners typically see an increase in business of 15% to 150%. Using the smaller number, consider the following example.

A small business generating $1,000.00 a day in revenue adds an electronic message center. The business soon increases by 15%, adding another $150 per day in total revenue. That translates into an additional $1,050.00 a week in revenue, or $54,600.00 per year.

It has been said that in retailing, "the last dollars are the best dollars," meaning that each additional customer adds a greater marginal percentage to the business's bottom line profit. In the foregoing example, we can only speculate upon the actual impact upon profit, but assuming that the business was at or above its "break-even" point before adding the electronic message center, the addition of $54,600.00 per year in revenue would clearly add to the business's profit.

Keep in mind that with this example, the investment in the electronic message center unit would likely be about one-third of the additional revenue generated in the first year of its operation alone.

7. How much can I expect to spend on an electronic message center?

Before you wonder how much a business will spend on an electronic message center, first determine how much will be spent overall on marketing and advertising. It is not uncommon for a business that is already using a variety of media advertising without an electronic message center to divert some of those advertising dollars to an investment in one of these displays, greatly increasing exposure, business volume and customer acquisition - all without spending any additional revenue.

Technological breakthroughs have reduced the costs of producing these communications devices and have considerably reduced the previous level of expense for operating message centers. New technology is available that allows message centers to:

• operate 24 hours a day continuously for many years with minimal bulb or LED replacement; and
• consume electricity at a daily cost of as little as $0.20 for a small LED display, or approximately $74.00 per year.

Best of all, these new message centers can be purchased for much less than their predecessors. Even small and medium-sized companies are finding an investment in a changeable electronic sign is worthwhile. Technological advancements are occurring so rapidly that a greater variety of these signs is within financial reach, offering the small business a tremendous on-site advertising tool that ties the advertised product directly to the location where it can be purchased.

8. What about safety? Aren't EMCs a distraction for drivers?

Over the last few decades, discussion pertaining to signage has centered on four fronts:

1. maintaining the economic vitality of commercial districts through signage
2. the First Amendment (see this SBA site's "Legal Considerations" and the "Legal Resources" in the Glossary/Resources tab for in-depth detail about legal rights, protections and more)
3. community aesthetics; and
4. traffic safety.

Some might argue that signs cause traffic accidents by distracting the driver of a vehicle. However, this has never been proven to be the case with a well-designed sign. A well-designed sign has a brief, easy-to-read message, in lettering large enough to be easily seen and read by a driver. Further, the sign is illuminated to assist in its visibility and legibility. The sign is of a sufficient size and height that it is easily seen, as well as placed in a location where a driver would naturally look.

If anything, well-designed and placed signage can increase safety. As quoted in the article, "Traffic and On-Premise Sign Regulation"* which speaks to this issue of safety in detail, "To facilitate safe movement and meet information needs, roadside signs, both commercial and noncommercial, must provide drivers with clear messages that are visible under all environmental conditions." The article continues with, "Signs that do not optimally communicate … can create driver frustration or disorientation." And finally, "These driver behaviors many times cause accidents - accidents which might have been avoided had the pertinent sign been visible and readable in sufficient time for the viewer/driver to process its message and safely respond."

Electronic message centers - like other types of signage - when properly designed, placed, maintained, and illuminated can actually promote greater traffic safety.

* "Signline", a publication of the International Sign Association, has given us permission to reproduce the 2001 article, "Traffic and On-Premise Sign Regulation". This article also outlines the standards outlined by the Federal Highway Administration (FHWA) in their "Manual on Uniform Traffic Control Devices" (MUTCD). Click here to view the article (in pdf format).

9. What about face changes? Can I change the face or copy of my sign?

The subject of copy and face changes on signs, and exactly how much control regulators should have over it, is riddled with complexities. The federal courts have been clear in restricting sign codes to content-neutral regulations of time, place and manner of display, but what about copy and face changes? Several cases have bearing on the issue.