A Silicon Valley start-up is proposing a new way to sharply expand the capacity of cable networks, reports the Wall Street Journal. BroadLogic Network Technologies has announced a new chip that will eliminate the need for MSOs to broadcast bandwidth hogging analog signals over their networks. Broadlogic proposes the MSO would install a small gateway with this "headend on a chip" either bolted outside the home or in the basement.

This new technology would allow operators to shut off the analog signal across an entire node, freeing up between 450 and 500 Megahertz worth of spectrum, according to the company. When transmissions hit the gateway, the chip apparently converts an MPEG-2 stream into 80 NTSC-compliant analog channels plus 240 audio channels with VBI information. The upgrade may be a tough sell to cable providers; the Journal notes each gateway could cost as much as two set-top cable boxes.

Despite ample talk of a cable industry bandwidth crunch, a recent report suggested that cable providers currently have more than enough capacity to compete with telco fiber systems and offer additional HD and VOD services. It may simply take some work. Solutions include reclaiming analog TV spectrum, splitting fiber nodes, and, most importantly, employing switched broadcast video (SBV) techniques.

Time Warner Cable has improved their capacity by 50% in switched digital video trials. From that recent report:

"Each analog channel consumes 6 MHz of capacity (or roughly 1/125th of the total capacity of an upgraded cable plant). Re-claiming that channel slot frees up enough capacity to launch 2½ more channels in HDTV (each of which consumes about 2.4 MHz), or ten more digital channels (each of which consumes about 0.6 MHz), another ten QAMs, each capable of delivering an additional VOD stream, or another doubling of broadband [Internet] capacity (which today operates out of a single 6 MHz channel slot)."

This optimistic report is in contrast to a CableLabs report from August that suggested another round of multi-billion dollar upgrades might be in order and that MSOs might be better off just running fiber to the home.