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Chip Maker Entropic Gets Nod From Cable and Other Backers

Entropic Communications is developing new set-top chip technology that the company says will help redefine the home-networking space.

Company executives are keeping exact details of the chip close to the vest, but said its transmission capacity of 200 Megabits per second will be enough to send multiple HDTV feeds, standard-definition video feed plus broadband gaming from a main DVR-type set-top to other TVs throughout the home.

The pitch to cable operators is that instead of buying multiple DVRs to connect various TVs, use Entropic chips in the main set-top, then distribute content throughout the home from there.

The idea is intriguing enough that Entropic has a Who's Who list of venture capital firms and cable players backing the company.

Entropic raised $46 million in two rounds of funding from partners including Time Warner Investments, Cisco Systems Inc., Comcast Interactive Capital, Intel Corp., Motorola Inc., Panasonic Corp., Redpoint Ventures and YAS Venture Partners.

"We're providing a new technology to have broadband multimedia distribution throughout the home," said Patrick Henry, CEO of Entropic. "The key thing is broadband. We can do multiple channels of HDTV with trick modes.

"Today, there are islands of home entertainment throughout the house. We'll provide the technology to connect these islands together."

Henry said Entropic is developing a baseband and radio-frequency chip design it hopes to have in the market for trials by early next year. He sees deployments beginning in late 2004, with a larger ramp-up in 2005.

The chip would reside inside new set-tops. Operators would be able to use existing cable drops and coaxial cable in the house to send content from a main DVR, for instance, to separate thin-client set-tops without the need for secondary DVRs, a potential huge cost savings.

Analysts estimate cable MSOs could have close to one million DVRs installed by year-end, and the competition will only heat up next year if Rupert Murdoch's News Corp. is successful in buying DirecTV Inc.

"The time is ripe for in-home connectivity for video networks," Henry maintains. "You're seeing DVD recorders that also have hard drives, and you'll see more and more content in an island fashion. People want to have access to those movies in the bedroom."