EUROPEAN COMMISSION. Brussels, 16 March 2005 C (2005)586 fin. State aid N 622/03 Austria Digitalisierungsfonds. Madam, I.

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1 EUROPEAN COMMISSION Brussels, 16 March 2005 C (2005)586 fin PUBLIC VERSION WORKING LANGUAGE This document is made available for information purposes only. Subject: State aid N 622/03 Austria Digitalisierungsfonds Madam, I. PROCEDURE 1. By letter registered on 12 December 2003, the Austrian authorities notified a scheme with regard to the promotion and development of digital television in Austria ( Digitalisierungsfonds ). By letter registered of 11 February 2004, the Commission requested information to which the notifying party provided additional information in a letter registered on 10 March A meeting involving the Commission and the Austrian authorities took place on 8 July The Commission sent a complementary request for information on 22 July By letter registered on 17 September 2004, the Austrian authorities informed the Commission about substantial modifications in the notified measure. The Commission requested additional information in a letter sent on 21 October 2004 to which the Austrian authorities replied by letter of 19 November The Commission asked for an extension of the deadline on 21 January 2005 by two additional months. The Austrian authorities granted the extension on 28 January Ihrer Exzellenz Frau Dr. Ursula PLASSNIK Bundesminister für auswärtige Angelegenheiten Ballhausplatz 2 A Wien Europese Commissie, B-1049 Brussel - België. Telefoon: (32-2)

2 II. DESCRIPTION OF THE MEASURE 2. General objective: The measure is set up to support the introduction of digital television transmission technologies and applications for broadcasting and to facilitate the switchover from analogue to digital television in Austria. The measure is intended to renew and strengthen all platforms for the transmission of broadcasting signals. According to the Austrian authorities, the measure is in line with the Action Plan eeurope , the conclusions of the Council of Ministers for Transport, Telecommunication and Energy of 20 November as well as the Communication on the transition from analogue to digital broadcasting ( Switchover Communication 3 ). 3. Background: Compared with analogue TV, digital television provides many advantages: digital transmission of television provides for better use of the scarce frequency spectrum, allowing for more TV channels. The availability of more channels is also seen in many countries as a way of enhancing media pluralism. In addition, digital TV provides for better picture and sound quality and enables additional interactive services. According to the Austrian authorities, the switchover to digital TV involves significant costs for various players, which in turn may hamper or delay the introduction of digital television in Austria. First of all, broadcasters and providers of transmission services will have to invest in new equipment. Second, broadcasters will face additional costs due to the obligation to broadcast simultaneously in analogue and digital transmission mode. Third, consumers will have to be convinced by the added value of this new technology before they purchase new terminal equipment. By setting up a dedicated fund, the Austrian authorities intend to overcome some of these barriers by providing financial incentives in well-defined categories to speed-up the introduction of digital TV in Austria. 4. Description of the measure: The scheme aims at supporting projects in five categories, as outlined in the Guidelines for grant allocation ( Guidelines ). I. Pilot projects and research activities regarding the digital transmission of broadcasting This sub-measure will support pilot and research projects to test digital transmission technologies, programming development and interactive applications. II. Development of programs and innovative services Projects in this category will develop, for instance, electronic programme guides, navigators, interactive and mobile applications which make use of the additional programming and interactive benefits of digital transmission. Only projects which go beyond the limits of conventional broadcasting applications will be funded. 1 COM(2002) 263 final, eeurope 2005: An information society for all. 2 See document 14469/03 TELECOM 141 Audio 22, 2543rd meeting 3 COM(2003) 541 final, Communication on the transition from analogue to digital broadcasting (from digital switchover to analogue switch-off ). 2

3 III. Financial interventions in order to comfort the digital switchover This measure aims at contributing to broadcasters additional costs due to the obligation to transmit in both analogue and digital transmission modes during a clearly defined simulcast phase. Grants are not intended to cover the usual operating costs of broadcasting but to co-fund the directly attributable, actually incurred eligible costs of broadcasters due to continued additional analogue transmission via cable, terrestrial or satellite transmission operators. In this context, it is also possible to award grants to broadcasters for investments enabling digital signal transmission. IV. Financial incentives for consumers to switch to digital reception at an early stage The introduction of digital broadcasting will also require the replacement or upgrading of end-user devices. The Austrian authorities argue that subsidies to the consumers characterized as early adopters are necessary to reach a critical mass of users of such equipment. Funding of projects under this measure has to be designed on degressive terms, meaning that incentives will be highest in cases where consumers decide to adopt the new technology quickly and at an early stage. The Austrian authorities state that a co-funding of terminal equipment may only be granted if the market price of the equipment (set-top boxes) represents a purchase barrier for end users. The support for projects of this sub-measure is limited to 24 months. V. Subsidies for low-income consumers purchasing terminal equipment This measure is targeted to prevent the exclusion of low-income households from access to digital television by providing financial support for the purchase of set-top boxes for digital TV. This is to enable low-income households to have access to digital television with upgraded analogue television sets once analogue TV is being phased out. Without such an upgrade, these citizens would no longer be able to receive television signals with their existing TV sets and, consequently, be excluded from this information source. According to the notification, grants for this sub-measure can only be taken into consideration once digital broadcasting coverage has been established and analogue transmission is close to switch-off. 5. Legal basis: The measure is based on the KommAustria-Gesetz (KOG) BGBl. I, Nr. 32/2001 idf BGBl. I, Nr. 97/2004, 9a 9e and Richtlinien über die Förderung von Projekten durch den Digitalisierungsfonds (Version of ) in connection with 21 Privatfernsehgesetz (PrTV-G). The last modifications were introduced by means of the Bundesgesetz, mit dem das Privatradiogesetz, das Privatfernsehgesetz (PrTV-G), das KommAustria-Gesetz und das ORF-Gesetz geändert werden sowie das Fernsehsignalgesetz aufgehoben wird (published on under BgBl. I Nr. 97/2004 and 3

4 entered into force on ). Funding has to be in line with the digitisation concept of RTR GmbH 4 ( RTR ) based on 21 Privatfernsehgesetz (PrTV-G). 6. Budget and duration: The planned annual amount for the overall measure is 7.5 million per year and financed via the central federal budget with funds from the licence fees (Rundfunkgebühr). Funds are allocated almost exclusively via grants 5. The current scheme is not limited in time but clearly targeted at temporary measures related to the introduction of digital television in Austria. The measure will be reviewed by the Austrian authorities two years after entering into force. Such a review is also possible if the digitisation concept in 21 Privatfernsehgesetz (PrTV-G) is modified. 7. Beneficiaries: The Guidelines for the allocation of funds foresee specific requirements for each funding category. Beneficiaries of the measures I and II will be, inter alia, broadcasters, network operators, equipment manufacturers, technology companies or service providers but also research institutes. Grants under sub-measure III can only be awarded to broadcasters as specified in the relevant Austrian legal framework. Beneficiaries of sub-measures I to III are citizens, legal entities or commercial-law partnerships whereas sub-measures IV and V are targeted specifically at citizens. 8. Funding criteria: Funds will be allocated following the Guidelines for the allocation of funds ( Richtlinien ) via calls for proposals. These calls will ask for the submission of projects in the specific areas addressed by the measure. Grants will be awarded for innovative projects which are in line with the objectives of the Fund and with the applicable Digitisation Concept under 21 of the Privatfernsehgesetz (PrTV-G). Funding can only be awarded where a project would not be sustainable without a grant from the Digitalisierungsfonds. 9. Eligible costs: Grant recipients may only claim the directly attributable, actually incurred costs for the projects, as outlined in the Guidelines, depending on the project category (see paragraph 2). The Austrian authorities foresee a cofinancing of a maximum of 50% of the eligible costs which may not be cumulated with other funds of the Austrian federal government. However, an accumulation with other funds not stemming from the Austrian federal budget is possible up to 60% of the eligible costs. 10. Administration of the measure: The subsidies will be allocated by the RTR by means of a dedicated fund, following the Guidelines. 11. Whereas the notified measure initially favoured digital terrestrial television, the Austrian authorities have, during the notification process, modified the measure subsequently in order to promote the digitisation of all broadcasting transmission networks (terrestrial, cable and satellite). Notably, during the notification procedure, the authorities decided to remove an envisaged measure on the 4 Rundfunk und Telekom Regulierungs-GmbH, the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR GmbH) was established as the operative arm of KommAustria as well as the Telekom Control Commission under the KommAustria Act (KOG) of April 1, Although, according to the Austrian authorities, under certain circumstances, which are not further clarified, loans and interest subsidies might also be granted. 4

5 specific funding of the roll-out of DVB-T (Digital Terrestrial Television) infrastructure from the notified scheme. In this respect, the Austrian government has stated that the Commission will be informed in due time about further developments related to this measure. 12. During 2004, the Austrian authorities also conducted a regional trial for DVB-T in Graz, co-organised and co-funded by RTR 6, which, according to the authorities, is not part of the notified measure and the related funds. 13. The Commission wishes therefore to highlight that the present decision only concerns the notified measure and projects, after the amendments and as outlined in the Richtlinien über die Förderung von Projekten durch den Digitalisierungsfonds. This decision does not concern other specific measures related to the introduction of digital terrestrial television as outlined in 9b (5) KommAustria-Gesetz (KOG) 7 III. ASSESSMENT OF THE AID MEASURE: PRESENCE OF AID 14. According to the EC Treaty and consolidated case-law there is State aid within the meaning of Article 87(1) when: there is an intervention by the State or through State resources; it confers an advantage on the recipient and is selective; it distorts or threatens to distort competition; the intervention is liable to affect trade between Member States; State resources 15. The Commission notes that the notified aid scheme is funded directly from the budget of the federal Austrian government, by means of funds stemming from the Austrian licence fees ( Rundfunkgebühr ). Hence, these monies can be considered as State resources. Economic advantage and selectivity 16. The notified scheme confers an economic advantage to the beneficiaries. The beneficiaries of sub-measures I-III receive a subsidy for the projects undertaken within the scheme, which effectively reduces the costs of the beneficiaries for the co-funded measures. In addition, the Commission notes that it cannot be excluded that sub-measure III also indirectly benefits the particular providers of broadcasting transmission services chosen by the broadcasters. Moreover, albeit the direct beneficiaries of sub-measures IV and V are end users, network operators and producers of terminal equipment might profit indirectly from the monies distributed for projects in this category. The notified scheme is selective since it is partially targeted towards undertakings active in the sectors related to the digitisation of television, for instance broadcasters and partially, directly or indirectly, towards undertakings active in the market for digital transmission 6 Abschlussbericht DVB-T Testbetrieb Graz 2004, RTR GmbH, Wien, KommAustria-Gesetz BGBl.I Nr. 32/2001 idf BGBl. I Nr. 97/2004 5

6 services 8. The Austrian authorities actually had put forward that the measure was of a general character since it does not grant an advantage to specific undertakings. However, when the Commission posed questions regarding the selectivity of the scheme, the authorities did not deny that the measure as such has a selective character. As the Court held in Adria Wien, the measure grants an advantage to a specific sector and is thus to be considered as a specific measure 9. Distortion of competition 17. When State aid strengthens the position of an undertaking compared with other competing undertakings, the latter must be regarded as affected by that aid. For instance, a particular development or application supported by the fund via submeasures I or II will not compete on equal terms with a similar development by another undertaking which is not funded by the scheme 10. Hence, these submeasures distort competition. Broadcasters benefiting from the subsidies under sub-measure III during the simulcast phase compete with other broadcasters who will not benefit from the same funding. Moreover, it cannot be excluded that there are indirect benefits to some broadcasting transmission providers via submeasure III. Hence, there are potential distortions of competition in the market for broadcasting and potentially in the downstream market for digital transmission services. In addition, in view of future applications of the digital networks, e.g. for video on demand or mobile services, the distortion of competition may well affect emerging markets. Finally, the indirect beneficiaries of sub-measures IV and V may be network operators and terminal equipment manufacturers. Competition between undertakings which will benefit from the scheme and the ones which will not receive funding will also be distorted. 18. Although the Austrian authorities put a number of safeguards in place which tend to reduce some of the potential negative spill-overs of the intervention (see paragraphs on proportionality, para 38 ff.), the measure still distorts competition. Effect on trade 19. Finally, it can be concluded that there is an affectation of trade. Most prospective participants in projects covered by the scheme - as outlined in paragraph 7 - as well as the potential indirect beneficiaries of measures III, IV and V (providers of broadcasting transmission services, terminal equipment manufacturers) are active on community and international markets. Providers of broadcasting transmission services compete cross-border with each other as well as with other providers of electronic communications services. Broadcasters operate on the advertising markets and purchase content rights across borders, competing with companies from other Member States. Producers of terminal devices are competing on an international level with other equipment manufacturers. 8 Under the new Regulatory Framework for electronic communications, this is market 18 : broadcasting transmission services, to deliver broadcast content to end users. See Commission recommendation 2003/311/EC of 11 February Case C-143/99, Adria Wien Pipeline, [2001] ECR I The various categories of potential beneficiaries of these sub-measures are mentioned in paragraph 7. 6

7 Conclusion 20. In view of the above, the Commission considers that the project grants a selective economic advantage to the selected beneficiaries of the notified scheme as well as to some potential indirect beneficiaries, as outlined above. The scheme is publicly funded, distorts competition and has an effect on trade between Member States. Therefore the Commission regards the notified measure as constituting State aid within the meaning of Article 87 (1) of the EC Treaty. 21. Having established that the project involves aid to the beneficiaries within the meaning of Article 87(1) of the EC Treaty, it is necessary to consider whether the measure can be found to be compatible with the common market. IV. ASSESSMENT OF THE MEASURE: COMPATIBILITY ASSESSMENT Compatibility ex article 87 (2)(a) EC 22. The specific sub-measure V. Subsidies for low-income consumers purchasing terminal equipments is targeted at individual consumers. Article 87 (2)(a) of the EC Treaty states that: aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned shall be compatible with the Treaty. 23. Thus, in order for this specific sub-measure to be compatible it needs to meet three conditions. First, the measure has to be granted to individual consumers. Secondly, the measure needs to be of a social character. Indeed, this measure is actually aimed at citizens with lower incomes to enable them having access to digital television with upgraded analogue television sets once analogue TV is being phased out. Without such an upgrade, these citizens would no longer be able to receive television signals with their existing TV sets and, consequently, be excluded from this information source. Finally, the measure does not discriminate regarding the origin of the products or the origin of the services concerned. Based on the information provided, it seems that the measure does not discriminate between the origin of the set-top-boxes eligible for the subsidy. 24. Therefore, the conditions as laid down in Article 87(2) EC are met for submeasure V.. Moreover, the aid will only be granted as of the moment that the digital transmission has been built up and the analogue transmission network is about to be switched off. Hence, this specific sub-measure is compatible with the common market under 87 (2) (a). 25. The Commission notes that the other categories of support (measures I to IV) aim at supporting and facilitating the introduction of digital transmission technologies for broadcasting and the switchover from analogue to digital television. The Commission acknowledges that the existing frameworks and guidelines interpreting Art. 87(3) cannot be applied to assess aid measures that specifically target this objective. The Commission therefore considers that the assessment of the compatibility of the measure with the common market needs to be based directly on Article 87(3)(c) of the EC Treaty. The Austrian authorities have argued however that the measure is compatible under Article 87(3) (b) EC 7

8 Treaty. Therefore, before assessing the compatibility of the measures under Article 87 (3) (c) EC Treaty, this argument will be dealt with first. Compatibility ex article 87 (3) (b) EC; project of Common European Interest 26. The Austrian authorities have argued in their notification of 12 December 2003 that the notified measure is compatible with the EC Treaty since it is in line with the eeurope Action plan and thus, for this sole reason, can be considered a project of common European interest. The authorities reiterated this argument in their submission of 10 March First of all, the Court has endorsed the Commission s view that defines a project of common interest only if it forms part of a transnational European programme supported jointly by a number of Member States 11. This is not the case in the measure at hand. In addition, the mere fact that the aid supports investments in new technology does not make the project one of common interest. Finally, even if the eeurope Action plan were a Community funded programme, which it is not, and an important project of common interest, it would not automatically follow that each of the individual projects satisfies the criterion of Article 87(3) b EC. 28. The Commission therefore considers that this derogation is not applicable in the case at hand. Compatibility ex article 87 (3)(c) EC 29. Article 87(3)(c) of the EC Treaty states that: aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest may be considered to be compatible with the common market. 30. In order for the aid measure to be compatible with Article 87(3)(c) of the EC Treaty, it must be proportionate to the objective and must not distort competition to an extent contrary to the common interest. The trade-off between the advantages for the Austrian society and its economy in terms of digitisation and the disadvantages in terms of distortion of competition and trade has to be assessed. The measure should also be evaluated with regard to the requirement that the least distorting measure, which nevertheless produces the required results, is adopted. Necessity of the measure Preparatory efforts in Austria 31. After open consultation involving all players concerned by the digital switchover, the Austrian communications regulator KommAustria presented its switchover strategy, with a focus on digital terrestrial television, in its Digitalisierungskonzept 12 of December Whereas digitisation of terrestrial 11 Court cases 62/87 and 72/87, Exécutif Régional Wallon v. Commission [1988] ECR Digitalisierungskonzept zur Einführung von digitalem terrestrischen Fernsehen gem. 21 Abs. 5 PrTV- G, KommAustria, Dezember 2003 und Erläuterndes Hintergrundpapier zum Digitalisierungskonzept, KommAustria, Dezember

9 television is pending, digitisation of satellite and cable transmission networks has already started in a market-driven way over the past years. A study commissioned by the Austrian authorities shows that appropriate government action can play an important role in facilitating the introduction of digital TV in Austria and provides some indications on the cost of the digital switchover 13. The Digitalisierungskonzept as well as the study highlight the potential advantages of digitisation for the Austrian economy and society as a whole. 32. Taking into account these findings, the Austrian authorities came to the conclusion that financial incentives in the specific categories funded under the notified measure will help motivating industry players, broadcasters and consumers to switch to digital TV. The Switchover Communication 33. The Commission has recognised the importance of the switchover from analogue to digital transmission and its benefits in the Action Plan eeurope as well as in its Communication on the transition from analogue to digital broadcasting ( Switchover Communication 15 ). In comparison with analogue TV, digital transmission of television provides for better use of the scarce frequency spectrum, allowing for more TV channels. The availability of more channels is also seen in many countries as a way of enhancing media pluralism. In addition, digital TV provides for better picture and sound quality and enables additional interactive services. 34. In its Switchover Communication, the Commission points out that the switchover from analogue to digital broadcasting will involve significant costs and difficulties and that government intervention might be necessary in cases where general public interests are at stake or in cases of market failure. Although with particular respect to digital terrestrial television, the Switchover Communication states that coordination problems could arise since the parties benefiting the most from switchover (equipment manufacturers or potential beneficiaries of released spectrum, including new broadcasters) may be different from those likely to bear the costs (final users or current broadcasters). So the latter have little incentive to internalise the costs and contribute to the switchover. Overcoming this kind of situation would require setting up coordination mechanisms to share benefits and costs between all parties involved, ideally with little or no public intervention Hence, the digitisation of TV transmission constitutes a policy objective which can be seen in line with Community interest and priorities. However, state intervention has to be technologically neutral 17 and concern all networks for the transmission of broadcasting signals: mainly cable, terrestrial and satellite 18. Moreover, it has to be proportionate and should not unduly distort competition. 13 Hirschle/Berner/Hamann: Der Umstieg auf DVB-T in Österreich, Schriftenreihe der RTR GmbH, Band 4/ COM(2002) 263 final, eeurope 2005: An information society for all. 15 COM(2003) 541 final, Communication on the transition from analogue to digital broadcasting (from digital switchover to analogue switch-off ). 16 op. cit. 17 op.cit. 18 and potentially also digital TV via xdsl over telephone lines. 9

10 36. When companies undertake research and development, this activity may generate positive spill-over effects for the whole economy. Sub-measures I and II are targeted at activities similar or related to research and development and the results of the funded projects have to be made available to the public (as long as no justified interests of the grant recipients are violated). As outlined in the Commission s framework for State Aid for Research and Development 19, which is partly based on Article 87 (3) (c) EC, State aid can be justified when it is necessary to increase incentives to innovate where this does not lead to a crowding out of private initiatives or to unfair competition. The Austrian authorities have shown in the information submitted as well as in their preparatory actions that co-funding of, for instance, pre-competitive development activities can provide incentives for market players to contribute to the development of digital TV in Austria. State support in this area can jump-start initiatives by market players and lead to positive spill-overs for the development of digital television in Austria and for the ICT competitiveness of the Austrian economy. 37. The switchover from analogue to digital transmission will happen by means of a phased approach, inter alia due to frequency management considerations and the need for operators and consumers to prepare the transition to digital TV. During the so-called simulcast phase, broadcasters have to transmit their programmes in both analogue and digital transmission modes. Sub-measure III of the notified scheme aims at contributing to broadcasters additional costs due to the obligation to transmit in both analogue and digital transmission modes during the simulcast phase. Grants are intended to co-fund the directly attributable, actually incurred eligible costs of broadcasters due to the temporary additional analogue transmission via cable, terrestrial or satellite transmission operators.. Hence, by means of this sub-measure, the Austrian authorities aim at covering part of the additional cost of broadcasters caused by the additional burden to broadcast in both analogue and digital mode. 38. In its Communication on interoperability of digital interactive television services, the Commission states that One way of reducing the additional costs to consumers of equipment is to subsidise purchases at the level of the consumer. Member States may therefore offer consumer subsidies. Such consumer subsidies need to be technologically neutral and must be notified and conform to State Aid rules. 20. The specific sub-measure concerning set-top box subsidies IV. Financial incentives for consumers to switch to digital reception at an early stage is targeted at end users, technologically neutral and has been notified to the Commission. It is therefore in line with the Communication on interoperability. Proportionality 39. The Austrian authorities have designed the notified measure in such a way that it clearly addresses some of the identified problems during the introduction of digital television. The scheme provides well-defined financial incentives for broadcasters and end users switching to digital TV as well as to parties involved 19 Community framework for State aid for Research and Development, OJ C45, , p.5-16 and Commission communication concerning the prolongation of the Community framework for State aid for Research and development, p.3 20 COM(2004)541 final. Communication on interoperability of digital interactive television services,

11 in development activities, while respecting the principles of transparency, proportionality and technological neutrality. 40. In this respect the Commission notes the following positive elements, which are in line with the approach taken in the Switchover Communication and the Communication on the Interoperability: Technological neutrality: The measure as notified is technologically neutral, i.e. it does not favour a priori any given technology or transmission platform; Open call for proposals: The beneficiaries will be selected in open calls for proposals based on clear pre-defined criteria; Temporary funding: As recommended by the Switchover Communication 21, the funding provided for sub-measures I and III-V is clearly targeted at temporary activities related to the switchover. Funds will generally - be paid out on digressive terms. For instance, the funding for terminal equipment is limited to 24 months. Necessity test: The project guidelines foresee that potential beneficiaries have to show that their project would not be possible without co-funding by the Digitalisierungsfonds. The Austrian authorities state that a co-funding of terminal equipment may only be granted if the market price of the equipment (set-top boxes) represents a barrier for the purchase by the end users. Funding requirements: Grant recipients may only claim the directly attributable, actually incurred eligible costs for the projects and are required to use all funds for their specified purpose and in an economic and efficient manner. After the end of the funded switchover project, beneficiaries have to prove to RTR that they used the public funds in an proportionate way. Potential overpayments have to be reimbursed to RTR. Wide usage of project results: The Guidelines and the KommAustria-Gesetz stipulate that the results of all studies, pilot projects, research projects and program developments under sub-measures (I) Pilot projects and research activities regarding the digital transmission of broadcasting and (II) Development of programs and innovative services have to be made available to the public as long as no justified interests on the part of the grant recipient are violated. This limits the competitive distortions brought about by the funding of these sub-measures. Openness to non-austrian applicants: applications from non-austrian applicants are possible as long as they are citizens, legal entities or commercial-law partnerships based in the European Economic Area. Monitoring: RTR GmbH is obliged to submit annual reports on the allocation of the funds a copy of which will be transmitted to the Commission. In view of these safeguards and regulations, the Commission considers that the intervention is designed in a way that does not distort competition to an extent contrary to the common interest. 21 see Footnote 3 11

12 Conclusion In the light of the above, the Commission has come to the conclusion that the submeasures I IV described in paragraph 2 are compatible with Article 87(3)(c) of the EC Treaty. V. DECISION On the basis of the foregoing assessment, the Commission has accordingly decided that the aid involved in the scheme Digitalisierungsfonds is compatible with Article 87(3)(c) and 87 (2) (a) of the EC Treaty. The Commission reminds the Austrian authorities to submit copies of the foreseen annual reports on the implementation of the measure. The reports shall provide enough details for the Commission to monitor whether the measure distorts competition to an extent contrary to the common interest. The Commission further reminds the Austrian authorities that all plans to modify this aid scheme have to be notified to the Commission. If this letter contains confidential information which should not be disclosed to third parties, please inform the Commission within fifteen working days of the date of receipt. If the Commission does not receive a reasoned request by that deadline, you will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter in the authentic language on the Internet site: Your request should be sent by registered letter or fax to: European Commission Directorate-General for Competition State Aid Greffe Rue de Spa, 3 B-1049 Brussels Fax No: For the Commission Neelie KROES 12