Silicon Valley chip startup BroadLogic Network Technologies Inc. unveiled a new video processor Monday that, it claims, will enable cable operators to triple their digital video spectrum and upgrade their networks to all-digital transmission at relatively little cost.

BroadLogic says the chip, known as the BL80000 TeraPIX model, is "the world's first massively parallel, multi-channel video processor," capable of decoding dozens of digital video streams from the cable plant and converting them into analog signals as they enter the subscriber's home. The San Jose, Calif., company says the chip can decode more than 80 analog channels and up to 160 standard-definition (SD) or 50 high-definition (HD) TV channels simultaneously.

The beauty of this technology, according to BroadLogic, is that cable operators wouldn't have to install a digital cable set-top on every TV set in the home to deliver digital service. Nor would they have to upgrade their plant to 750 MHz or higher capacity to go all-digital.

Instead, equipment manufacturers would embed the TeraPIX chip inside a residential gateway, sitting just outside or inside the home. This device would then process all digital and analog channels from the cable network, enabling the signals to be transmitted in all-digital format until they reached the home.

That's in contrast to digital cable set-top boxes, which handle one channel at a time, thereby requiring the installation of one set-top per TV set. BroadLogic says TeraPIX would let all TV sets in the home feed from one central gateway, and it would convert all the digital channels to analog, meaning the home wouldn't have to be ready for digital cable.

"You don't need to go 100 percent digital to utilize this technology," says Thomas Ayers, VP of systems engineering at BroadLogic. Besides decoding more than 80 analog channels, the chip would also support other analog cable requirements, such as closed captioning, emergency alert information, and V-chip data.

BroadLogic officials don't see chip-embedded residential gateways as total replacements for digital set-tops in the home because advanced digital set-tops can do other things -- digital video recording (DVR), for example. But they believe the video processor could particularly help smaller, rural cable systems make the switch to digital without having to spend heavily on network upgrades and new digital TV gear.

"Now all of the TV sets work in the home without having to have a set-top box," says former Charter Communications Inc. CTO and executive VP Wayne Davis, who sits on BroadLogic's advisory board. "This lets us essentially manage a whole home with this one chip."

Moreover, Broadlogic executives argue that the shift to all-digital transmission would free up precious network bandwidth for MSOs. By allowing cable operators to send 80 or more analog channels in digital format, the chip effectively would take 500 MHz of cable RF spectrum and squash it down to just 50 MHz of spectrum, so freeing up about 450 MHz for additional digital services.

Industry analysts point out that cable operators, under increasing pressure from telcos expanding into the video market, need all the bandwidth they can get to fend off the competition. Mike Arden, principal broadband analyst for ABI Research , contends that MSOs now face "the competitive fight of their lives" from "unrelenting" telco competition.

Industry experts also note that growing consumer demand for HD, video-on-demand (VOD), VOIP, and faster broadband service is already forcing cable operators to convert much, if not all, of their analog spectrum to digital sooner than anticipated, even with recent upgrades to 750 MHz and even 860 MHz capacity. "It's gotten to the point where the spectrum is fairly well full," Davis says.

BroadLogic, which already sells chips to Cisco Systems Inc. (Nasdaq: CSCO) (one of BroadLogic's backers) for pre-Docsis 3.0 wideband cable modems, is "working very closely" with two unnamed cable operators on TeraPIX, according to the chip firm's CEO, Danial Faizullabhoy. The company also says it's talking to several "leading manufacturers" about developing residential gateways, set-tops, and other devices that would use the video processor.

BroadLogic, which holds 19 patents on the new chip, is now making it available in sample quantities at a price of $300 per unit for samples of up to 1,000 units. The company expects to start field trials on embedded equipment by the second half of next year, with commercial deployment following in 2008.

TeraPIX is the end result of a $20 million funding round that BroadLogic completed in 2004, Faizullabhoy says. All told, the 30-person company has raised $30 million. (See BroadLogic Lands $20 Million in Funding .)

— Craig Matsumoto, Senior Editor, Light Reading, and Alan Breznick, Site Editor, Cable Digital News