Board of Directors Meeting Minutes - October 20, 1997

The regular meeting of the Board of Directors of the Universal Service Administrative Company (USAC) (the Corporation) was held at the Doubletree Hotel Park Terrace, 1515 Rhode Island Avenue, NW, Washington, D.C., on the above date. The meeting was called to order at 1:30 P.M. by Dr. Henry Marockie (representing the Committee of the Chair).

1. Dr. Marockie welcomed the assembly and requested that members of the Board and NECA introduce themselves. Following introductions, Dr. Marockie rearranged the agenda with the concurrence of the Board. He then presented the Minutes of the September 22, 1997 Board of Directors meeting. Upon a motion duly made and seconded, the Minutes were approved unanimously.
   

2. Mr. Lynch presented a Report of the Committee of the Chair with respect to its work developing and reviewing a contract between USAC and NECA. He explained that the proposed contract had the following attributes: one-year term, flexibility for the CEO, a defined level of effort, and a reasonable estimated budget. The Committee's recommendation was that the full Board allow the Committee to execute the contract with NECA.
   
   Ms. Rosenblum added that the contract had also received review by outside counsel: Cherie R. Kiser, Esq. of Mintz, Levin, whose comments were incorporated therein. Mr. Stern indicated that one of the responsibilities of the USAC Board was to approve an estimate of USAC administrative costs for submission to the FCC in an October 31, 1997 filing. By allowing the Committee of the Chair to execute the proposed contract, the Board would also be approving the proposed USAC budget for the First Quarter of 1998.
   
   The Board discussed staffing levels, cost allocation between funds, and the estimated nature of the budget attachment to the contract. Mr. English explained the methodology used to arrive at the estimated expense budget. On motion duly made and seconded, the Board unanimously adopted the following Resolution:
   

   RESOLVED, that the Committee of the Chair is authorized to execute the contract with NECA on behalf of USAC, and that the estimated budget attached thereto act as the basis for the First Quarter 1998 projection of USAC administrative expenses.

   The Board thanked Sandy Fain, on the staff of MCI, for his assistance in reviewing the contract on behalf of USAC.
   

3. Ms. Gold reported on the meeting of the High Cost/Low Income Committee by summarizing the Minutes of the meeting and resolutions adopted by the Committee, which are attached as Attachment II. She asked that the full USAC Board consider the question of monthly versus quarterly billing for contributors. After discussion and motion duly made and seconded, the Board unanimously adopted the following Resolution:
   

   RESOLVED, that the USAC Board directs staff to petition the FCC for a waiver to permit monthly billing of USF contributions.

4. Mr. Ricker presented a report on the status of the Form 457 collection and compilation process. On motion duly made and seconded, the Board unanimously adopted the following Resolution:
   

   RESOLVED, that the USAC Board of Directors, having reviewed a summary of the results of data collection of telecommunication service provider revenues for the first six months of 1997 at its meeting on October 20, 1997, hereby directs the NECA staff to proceed with the required October 31, 1997 filing on behalf of USAC. NECA staff may make adjustments if additional data becomes available or errors are discovered, and to reflect changes required as a result of FCC orders.

5. Ms. Rosenblum reported that the Committee of the Chair had done some preliminary work on the selection of a Chief Executive Officer. The oard discussed some of the desired qualifications and whether or not the CEO would be full or part-time.
   
   On motion duly made and seconded, the following Resolution was adopted:
   

   RESOLVED, that the Committee of the Chair employ a search firm for the purpose of selecting a CEO for USAC. Prior to engaging the firm, the compensation level will be established by the Committee of the Chair.

6. Mr. English informed the Board that the Directors and Officers of USAC were automatically covered under the NECA D&O insurance policies. Upon assessment of additional risk, the carriers may adjust the premiums for the 1998 coverage year. Mr. Wheeler led a discussion concerning the responsibilities and potential exposure of Directors in performing their duties for the Corporation. On a motion duly made and seconded, the Board unanimously approved the following Resolution:
   

   RESOLVED, that outside counsel Mintz, Levin prepare an opinion letter to the Board on its interpretation of the potential liabilities to directors and officers of USAC, and that counsel work with the respective insurance carriers to ensure their understanding of the level of exposure.

7. Mr. Jackson requested a regulatory update on any pending actions or challenges to the USAC programs. Mr. Levy indicated he would update the chronology included in the September pre-Board materials.
   

8. Mr. English presented the Temporary Investment Guidelines for USAC. After discussion and upon a motion duly made and seconded, the Board unanimously adopted the following Resolution:
   

   RESOLVED, that the Temporary Investment Guidelines, as presented in the pre-meeting materials, are adopted and should be used by the Treasurer to manage the funds of the Corporation. The Treasurer is hereby authorized to utilize existing agreements and relationships established through NECA with Primary Dealers until such time as agreements are executed by the Corporation.

9. Mr. Stern reviewed audit requirements contained in the Order. A related report was included in the pre-meeting materials. The Board accepted his report.
   

10. Dr. Marockie indicated that the organization needed a permanent Chair. On a motion duly made and seconded, the Board unanimously elected Lisa Rosenblum as Chair of USAC and Dr. Henry Marockie and Don Lynch as Co-Vice Chair.
    

11. The next meeting was tentatively scheduled for November 17.
    

There being no further business to come before the Board, on a motion duly made and seconded, Dr. Marockie adjourned the meeting at 4:00 PM.

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Edward R. English,
Secretary

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