March 23, 2000 Minutes

Board of Directors Meeting

A joint meeting of the Board of Directors of the Universal Service Administrative Company (USAC) and its Rural Health Care and Schools & Libraries Committees was held via conference call on Thursday, March 23, 2000. Mr. Frank Gumper, Chair of the Board, called the meeting to order at 12:08 p.m. Eastern Time. Ms. Cathy Howard, Executive Assistant to the USAC CEO, called the roll on behalf of Mr. Edwin Eichler, USAC Secretary.

The Board of Directors and Committees immediately voted to go into Executive Session for purposes of discussing matters concerning the USAC Request For Proposals for Programmatic Support Services for the Schools and Libraries and Rural Health Care Programs and a USAC financial reporting issue.

Executive Session

1. Recommendation and Approval of the Next Step in the RFP Process of Selecting a Vendor for Programmatic Support Services for the Schools and Libraries and the Rural Health Care Programs. USAC staff reviewed for the Board of Directors and the Committee members the proposed next step in the RFP process of selecting a vendor.
   
   On a motion duly made and seconded, after an affirmative vote by the Rural Health Care Committee and the Schools & Libraries Committee, respectively, to approve the recommendation proposed by the staff, the Board of Directors as a body unanimously approved the following resolution. (Eleven members voted, representing a quorum; Ms. Bryant joined the meeting after the vote was taken.)
   
   RESOLVED, That the USAC Board of Directors accepts the recommendations made by the Rural Health Care Committee and the Schools and Libraries Committee and hereby approves the course of action proposed by USAC management regarding the proposals received in response to the Request for Proposals for Programmatic Support Services for the Schools and Libraries and Rural Health Care Universal Service Support Mechanisms.

The Rural Health Care Committee and the Schools & Libraries Committee voted to adjourn after each Committee's vote on the resolution, respectively.

2. Update on Financial Reporting Issues. See item #3 below.

   On a motion duly made and seconded, the Board of Directors unanimously voted to adjourn the Executive Session at 12:53 p.m. Eastern Time and go into Open Session for purposes of reporting actions taken and discussions held in Executive Session as well as to address other issues.

   On a motion duly made and seconded, the Board of Directors unanimously agreed to recess at 12:54 p.m., subject to the call of the Chair.

   At 1:02 p.m. Eastern Time, the Board of Directors reconvened. Mr. Gumper called the meeting to order and asked that the roll be taken. Ms. Howard called the roll.

Open Session

3. Report on the Update of Financial Reporting Issues. Mr. Barash reported that in Executive Session USAC staff informed the Board of Directors that USAC staff continues to work with the FCC and FCC auditors on the report that is being prepared at the direction of the Inspector General regarding FCC's consideration of the question whether the Universal Service Fund should be categorized as "federal funds" for accounting and financial reporting purposes. If it is determined that the Universal Service Fund should be categorized as "federal funds," the Board of Directors agreed that USAC requires formal written direction from the FCC before proceeding with such an action. USAC will have an opportunity to and will respond to any final report by the FCC.
   
   The Board of Directors DIRECTED USAC staff to keep them informed of any developments.
   

4. Appoint a Nominating Committee to Bring Recommendations to the Board of Directors for a USAC Treasurer to Replace Mr. Wayne Rehberger. Ms. Parrino informed the Board of Directors that Mr. Rehberger resigned from his position at MCIWorldCom effective March 10, 2000, and therefore, subsequently resigned from the USAC Board of Directors. Mr. Rehberger was USAC's Corporate Treasurer. A Nominating Committee needs to be appointed to bring recommendations to the Board of Directors for a new Treasurer.
   
   On a motion duly made and seconded, the Board unanimously adopted the following resolutions:
   

   RESOLVED, That the USAC Board of Directors hereby appoints Mr. Thomas Wheeler as Chair of the Nominating Committee and Mr. Kevin Hess, Ms. Martha Hogerty, and Mr. Isiah Lineberry as members and requests that the Committee bring nominations for the position of Treasurer to the April 18, 2000, Board meeting; and
   
   RESOLVED FURTHER, That the USAC Board of Directors authorizes the Chair of the Board to appoint a Nominating Committee on an as-needed basis.

5. Approval of USAC Annual Report to the FCC. Mr. Blackwell explained to the Board of Directors that each Board member should have received a copy of the Annual Report by FedEx as of this date. The FCC and Congress will also receive a copy on March 31 in the same format. The report will then be printed formally and distributed to other interested parties.
   
   On a motion duly made and seconded, the Board unanimously adopted the following resolution:
   

   RESOLVED, That the USAC Board of Directors authorizes staff to submit the USAC Annual Report to the FCC and Congress and to have formal copies printed and distributed to interested parties.

6. Miscellaneous.

Appointment of a Board Member to the High Cost and Low Income Committee. Ms. Parrino explained that Mr. Rehberger's resignation from the USAC Board of Directors leaves a vacancy on the High Cost and Low Income Committee. This vacancy must be filled by a Board member who represents the interexchange carriers (IXCs). Mr. Jackson represents IXCs and is not a member of the High Cost and Low Income Committee.

On a motion duly made and seconded, the Board unanimously adopted the following resolution:

RESOLVED that the USAC Board of Directors hereby appoints Mr. James Jackson of the USAC Board of Directors to represent interexchange carriers on the High Cost and Low Income Committee.

There being no further business to attend to, Mr. Gumper adjourned the meeting at 1:13 p.m. Eastern Time.

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D. Scott Barash
Assistant Secretary

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