CableLabs and SCTE/ISBE have inked a letter of intent (LOI) to combine the organizations, a move that underscores just how much the global cable industry is consolidating.

The proposed agreement has already crossed a few hurdles to get the combination finalized by January 1, 2021.

Figure 1:

SCTE/ISBE has set up a site to guide members through the finer points of the agreement heading into the December 10 vote.

The CableLabs board of directors – represented by more than a dozen cable operators and an executive committee that includes Comcast, Charter Communications, Cox Communications and Rogers Communications – have voted unanimously in favor of the LOI, Phil McKinney, president and CEO of CableLabs, said today in a press call.

Now clear of the SCTE's recent all-virtual Cable-Tec Expo, the executive team for SCTE/ISBE also voted unanimously for the LOI, according to Mark Dzuban, SCTE/ISBE's president and CEO.

The agreement is contingent on the vote of thousands of SCTE members. The organizations, which have set up a web page detailing the LOI, have set the vote for December 10, 2020. SCTE/ISBE must receive "yes" votes from two-thirds of 5% of the total number of organization members to move forward with the proposed transaction. If less than 5% of those members cast a vote in favor of the LOI, CableLabs and SCTE/ISBE "will decide next steps which may include re-opening the vote at a later date."

"We are moving forward at a very good pace," Dzuban said.

Under the proposed agreement, SCTE/ISBE and CableLabs would retain their distinct branding.

'10G' a key focus area

McKinney said the main driver for the combination is to boost collaboration and generate more scale between the industry's two largest technology organizations. The agreement, he added, also aims to bring the global industry closer together and the entire cable industry focused on "10G," a network-agnostic platform envisioned to support multi-gig symmetrical speeds, enhanced security and lower latencies. 10G is also entering the picture as the "cable" industry pushes ahead with network and service convergence initiatives.

"Our objective is to bring 10G to life," Dzuban said.

"We're seeing an accelerated pace of innovation," McKinney said, noting that members across both organizations are focused on areas such as DOCSIS and mobile convergence and the tech and training to support them all.

While SCTE/ISBE is focused on standards, training and major events such as Cable-Tec Expo, CableLabs has been more focused on specifications for interoperability alongside new technology initiatives.

"We felt that bringing the two organizations together would just really enhance the industry alignment and the pace at which we can go from the science side of the industry to the deployment and operations side of the industry," McKinney said. "It's also about economies of scale with the investment of time and dollars from the industry and be able to get those dollars applied to the work."

CableLabs (which also includes its Kyrio subsidiary) employs about 193 people, with SCTE/ISBE employing 36. Both are 501(c)(6) organizations, with CableLabs funding in the range of $70 million and about $15 million for SCTE.

Shared services model to be explored

Dzuban would report to McKinney under the new structure, but general staff reporting at the two organizations isn't expected to change. However, CableLabs does use a shared services model whereby operational functions such as IT, finance, human resources and marketing and events are spread across CableLabs, Kyrio and UpRamp, the CableLabs-backed startup incubator program.

"One of the operational efficiencies that we will be looking at is leveraging that shared services model," McKinney said. "The objective is not to stop any existing programs or stop any functions or roles."

CableLabs members (65 across the globe), meanwhile, will also get access to all SCTE services, he added.

Looking forward, SCTE/ISBE and CableLabs will continue to work closely together on Cable-Tec Expo, slated to take place next October in Atlanta. While the event is being designed for a live audience (pandemic willing), it will also employ a "hybrid" model that supports a digital, virtual component.

"The level of investment in Cable-Tec Expo will grow" as a result of the LOI, McKinney said. "We look at Expo as being the all-encompassing tech conference."

CableLabs still intends to host its new "4Front" event next June after being forced to cancel it this year because of the pandemic. McKinney characterized 4Front as a small "conversation event" for top execs.

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— Jeff Baumgartner, Senior Editor, Light Reading