Members of the SCTE/ISBE have voted in favor of a merger with CableLabs, an agreement that will effectively make the standards-setting organization a subsidiary of CableLabs on January 1, 2021.

SCTE/ISBE members voted on the proposal Thursday morning. The voting result was announced Thursday night and shared with SCTE members via an email distributed by SCTE/ISBE president and CEO Mark Dzuban.

To finalize a letter of intent (LOI) to combine the two organizations, SCTE/ISBE needed "yes" votes from two-thirds of 5% of the total eligible Society members. SCTE/ISBE entered the voting with approximately 13,200 active members eligible to vote and therefore needed at least 660 to show up and vote to achieve the required threshold. The CableLabs and SCTE boards voted unanimously in favor of the LOI prior to Thursday's vote.

"After completing an audit of the votes submitted on December 10th during the meeting, we hereby advise that the two thirds vote requirement to approve the transaction has been satisfied, the motion passes," Dzuban wrote in his message to members. "This action represents the final approval required to move forward with the transaction."

Several SCTE/ISBE members who took part in the vote (which was conducted over Zoom, with members casting their votes via a polling question) told Light Reading that the process moved forward after a Q&A session with leaders of the organization, including Tom Adams, SCTE/ISBE board chairman and EVP of field operations at Charter Communications.

They noted that a few SCTE/ISBE members expressed concern and some resistance to the combination prior to the official vote. But they also said it was clear early on that the motion would have little problem passing. Notably, members on the call were asked to weigh in informally (using the Zoom chat function) on how they intended to vote before the final votes were cast via a polling system, multiple SCTE members tell Light Reading.

"It was like an assumptive close," said an SCTE member who voted.

Dzuban urged SCTE-ISBE members to vote in favor of the agreement on the eve of the vote while also addressing some comments and concerns that had apparently cropped up during a 20-day review period in preparation for Thursday's vote.

"SCTE•ISBE IS NOT IN FINANCIAL DISTRESS as many have suggested," Dzuban wrote, according to a copy of the letter obtained by Light Reading. "This decision firmly positions SCTE for the future. SCTE has no debt and a significant reserve."

Dzuban also noted there "will be no changes to the SCTE staff," reiterating that he will continue to head up SCTE/ISBE following the combination with CableLabs. "I will continue to lead the SCTE. I will continue to push hard in support of our members and Industry in the very effective culture we have created over 50 years," added Dzuban, who will report to CableLabs CEO Phil McKinney.

Combo focuses on global scale, pursuit of '10G'

The vote was held about a month after the LOI was announced. The combination was proposed amid an ongoing consolidation of cable industry players, including both operators and vendors. The organizations reasoned that the merger would bring the global industry closer together and deliver more scale across the industry as it pursues "10G," the label given to a network-agnostic platform that will deliver multi-gig symmetrical speeds, enhanced security and lower latencies over hybrid fiber/coax (HFC), fiber-to-the-premises (FTTP) and wireless networks.

"Our objective is to bring 10G to life," Dzuban said when the LOI was announced.

"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," CableLabs CEO Phil McKinney said then. "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."

Specs, standards and training

Culmination of the agreement will effectively combine CableLabs, an industry organization that develops and manages interoperability specifications such as DOCSIS (and runs subsidiary called Kyrio), with SCTE-ISBE, a group that serves as the cable industry's standards-setting body and develops training programs. Historically, assurances have been put into place to ensure that there is proper separation between those functions as to avoid any potential antitrust concerns, industry sources with knowledge of that history explained.

The organizations are confident that this separation of functions will be preserved following the combination. Though SCTE will become a wholly owned subsidiary of CableLabs as of January 1, SCTE will have its own governing board, they noted. Additionally, SCTE will maintain American National Standards Institute (ANSI) accreditation as well as its "liaison relationship" with the International Telecommunications Union (ITU), according to the proposed transaction FAQ.

CableLabs employs about 193 people, with SCTE/ISBE employing 36, according to figures shared by the organizations in November. Both are 501(c)(6) organizations, with CableLabs funding in the range of $70 million and about $15 million for SCTE/ISBE.

SCTE/ISBE also hosts the annual Cable-Tec Expo. The 2020 event was held virtually. Next year's Expo is set for October 11-14 in Atlanta. SCTE/ISBE expects the 2021 show to be a hybrid event that includes the primary live, on-site components plus a virtual option for portions of the event program.

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— Jeff Baumgartner, Senior Editor, Light Reading