Pennsylvania Department of Transportation officials have warned Philadelphia’s mayor and City Council that the wireless-internet kiosks being installed throughout the city may violate rules against advertisements along state and federal roads, a breach that could cost the city millions in government funds for such projects as the planned cap over I-95 near Penn’s Landing.

The kiosks “may be considered outdoor advertising devices subject to PennDot regulation" under a law banning most advertising along roads that include some of Center City’s busiest throughways, deputy secretary for highway administration George McAuley wrote in a Dec. 20 letter to Mayor Jim Kenney and Council President Darrell L. Clarke.

McAuley’s letter came after advertising and media company Intersection had finished installing the first of what are expected to be 100 kiosks citywide under the “LinkPHL” moniker. Intersection has installed similar kiosk networks in New York, where it is based, and in Newark, N.J.

The tall, slablike WiFi hotspots also offer cell phone charging ports, telephones that can make domestic calls, and small screens displaying local information such as weather forecasts, all supported by big digital ads that run on the sides of the devices.

PennDot’s reaction to the kiosks is the latest volley in a years-long tussle between city officials and the transportation department over Philadelphia’s permissiveness toward outdoor advertising along federal- and state-controlled roads within its borders.

“While PennDot has no information regarding the location of the kiosks and whether any additional kiosks are to be installed, we are requesting that the city consult with PennDot prior to authorizing installation," McAuley wrote in his letter, which was obtained by anti-billboard advocacy group Scenic America under the state’s Right-to-Know law and provided to the Inquirer. “PennDot’s failure to effectively control outdoor advertising could result in the loss of federal highway funds"

If states fail to regulate advertisements along their state and federal roads, known as “controlled routes," they can lose 10 percent of their yearly allocation of federal highway funds. Or they can be barred from spending any highway money inside municipalities that are authorized to control their own ads, but are failing to do so.

Pennsylvania typically receives more than $1.6 billion a year in federal highway investments, according to PennDot, so it would lose at least $160 million if it were docked 10 percent. Philadelphia’s allocation for the fiscal year ending Sept. 30 is $162.7 million, according to the Delaware Valley Regional Planning Commission, which administers the program.

The federal funds are helping pay for Philadelphia projects including the planned cap over I-95 from Chestnut to Walnut Streets and the rehabilitation of the Market Street bridge over the Schuylkill River.

In 1974, PennDot agreed to let Philadelphia police controlled routes within its borders, which include busy urban arteries such as Market, Broad, Chestnut and Arch Streets, as well as limited-access routes such as I-95.

The state department in 2014 took back control of all of Philadelphia’s controlled routes except a strip of Market Street east of City Hall, fearing that some of the ads going up in the city could cost it transportation funds that are contingent on adherence to the federal laws.

About a year later, Philadelphia lost control of the Market Street segment, too, with Federal Highway Administration officials saying the city had not demonstrated that it was adequately vetting outdoor-ad proposals for legal compliance when awarding permits.

The kiosks at the center of the latest flare-up between City Hall and PennDot are being installed as part of a 20-year concession agreement with a company that merged to form Intersection. The deal, which was approved by City Council and signed by former Mayor Michael Nutter in 2014, also calls on Intersection to install ad-supported shelters and seating at transit stops.

Philadelphia could pocket an estimated $18 million in shared advertising revenue over the life of the agreement, city spokesperson Kelly Cofrancisco said in an email.

The Philadelphia Art Commission, which has jurisdiction over signage on city streets, has so far approved 35 kiosk locations, Cofrancisco said. Nine of these locations — including the seven that currently have kiosks in place — have received necessary approvals from the Philadelphia Streets Department and PennDot, she said.

This was contradicted by PennDot spokesperson Chelsea Lacey-Mabe, who said in an email that “PennDot has issued neither approvals nor permits for any kiosks in Philadelphia.”

“We are working with the city to schedule a meeting to discuss the issue,” she said.

The Federal Highway Administration said in a statement that it is “aware of the concerns raised regarding Philadelphia’s digital kiosks, and PennDot’s communication with city officials that these kiosks must conform with state and federal outdoor advertising requirements.”

Intersection said it “is aware of the letter and continues to work very closely with the City of Philadelphia and PennDot.”

“Each LinkPHL location requires review and permitting from PennDot as well as the Streets Department and Art Commission, and installation is on schedule,” the company said in a statement.

Clarke spokesperson Jane Roh said the Council president’s legislative staff is waiting to hear from the mayor’s office about timing for a meeting with PennDot.

Cofrancisco said city officials have been in contact with PennDot about the kiosks since receiving the December letter and that they “are optimistic we will be able to work through their concerns.”

“We have had similar conversations previously with PennDot about the advertising on street furniture controlled by the city," including on bus shelters and panels over subway entrances, Cofrancisco said. “The practice of advertising on state roads is not new.”

But Mary Tracy, executive director of Scenic America’s Philadelphia chapter, said ads on such street fixtures as bus shelters are routinely given a pass by regulators because they support what is seen as vital urban infrastructure. There is less of an urgent need for WiFi signals and power sockets to charge cell phones, which are already easy enough to access, she said.

“These are not such pressing needs that we want to give up our precious public space and treat our cities like we’re consumers, not citizens,” Tracy said. “The city has gone too far with this one.”