These schemes are a pain to work with, as if one line goes bad, every line after it won't have signal as well. Also, signal distribution is very uneven, as each outlet after the first one gets less and less signal. Usually in these cases, only the first 2 or 3 outlets will be able to run digital cable or a cable modem. The last outlets have too little signal or too much insertion loss to run these digital devices correctly.
This type of wiring is done rarely anymore, and anyone who does it should be shot (IMO).
Using DC Taps instead of splitters can usually make a loop system efficient!
In the above picture (which we'll all imagine as a beautiful, professionally done diagram, OBVIOUSLY not done with MSPaint), we see a very small 2 bedroom house with 4 outlets.
The numbers in green are the signal levels at that point. The numbers in RED are the signal loss from passing through the 2 way splitter (3.5db loss per leg).
I used 700Mhz because most cable operators run their cable modems in the 500Mhz to 900Mhz range. The higher frequency a signal is, the faster it is attenuated (lost).
Negative signal readings are NOT necessarily bad. Most TVs expect a signal between 7db and -5 db. After -5, the picture starts to get a little grainy. At -10, it is very grainy, and at -17 (depending on your TV), you have barely any picture at all.
Most cable modems run fine without a performance decrease at -8. In fact, most cable modems will probably receive their signal at -5 or so.
In this diagram, the cable modem would be receiving plenty of signal, even at the last outlet, but it still would not run (within specification) at the last 1 or 2 outlets.
Remember, cable modems have to talk BACK to your provider.
Please read my "provisioning" section about how cable modems sync with your provider.
In this case, the cable modem has too many obstacles to go through to get back to your provider. Your poor little device has to sit there and broadcast it's OWN signal up what is supposed to be a one way (downstream only) line. Of course, this depends on your area, but in my area, if I go through more than 2 or 3 splitters, the cable modem will be working too hard (upstream power) and is not acceptable.
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