U.S. Secretary of Transportation Ray LaHood is backing off plans by the agency to force thousands of localities to replace their perfectly good road signs.
The reversal comes after ABC News reported on new regulations that would have forced all cities and towns to buy new street signs.
"I believe that this regulation makes no sense. It does not properly take into account the high costs that local governments would have to bear. States, cities, and towns should not be required to spend money that they don't have to replace perfectly good traffic signs," said LaHood in a statement released Tuesday.
Now, U.S. Department of Transportation officials are asking for the public's input after considering the costs behind the changes.
Earlier, the Federal Highway Administration defended the changes as an effort to improve safety.
The new regulations, which were written under the Bush administration, were aimed at making signs easier to read for an aging population.
"If you can't read it, you can't see it or you can't comprehend it, it could be a distraction to you," said Federal Highway Administrator Victor Mendez earlier this week. "You could be in an accident, negative consequences could occur."
On Monday, the Federal Highway Administration announced on a new 45-day period of public comment on the rules and deadlines.
The federal government says THIS is harder to read than This.
ALL CAPS are bad. Mixed Case is Good.
The rules are part of a tangle of regulations included in the Manual of Uniform Traffic Control Devices.
The 800-plus page book tells local governments they:
-- Should increase the size of the letters on street signs from the current 4 inches to 6 inches on all roads with speed limits over 25 miles per hour. The target date for this to be completed is January 2012.
-- Install signs with new reflective letters more visible at night by January 2018.
-- And whenever street name signs are changed for any reason, they can no longer be in ALL CAPS.
In Milwaukee, this will cost the cash-strapped city nearly $2 million -- double the city's entire annual for traffic control.
In Dinwiddie County, Virginia -- with lots of roads but not many people -- the cost comes to about $10 for every man, woman and child.
"The money is better spent on education, or the sheriff's department or on public safety than something like that," said Harrison Moody, chairman of the Dinwiddie Board of Supervisors.
Many local residents in Dinwiddie say their current street signs work just fine, and they see no reason to change them.
"There are a lot of people out there that are hungry," said Dinwiddie resident Thomas Davis. "Why spend [money] on street signs when everybody can read a street sign or, if you don't know where you're going, get a GPS."
Whether or not requiring cities and towns to replace all their street signs improves safety, it would undoubtedly be a windfall for the multi-billion-dollar-a-year sign industry.
The American Traffic Safety Services Association -- which represents companies that make signs and the reflective material used on them -- lobbied hard for the new rules. And at least one key study used to justify the changes was funded by the 3M Corporation, one of the few companies that make the reflective material now required on street signs.
ABC News' Leezel Tanglao contributed to this report.