A couple of other reasons why Cat-5 cable isn’t a universal standard:
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Bandwidth. Cat-5 has a bandwidth of 200MHz. Cat-5e is 350MHz. That limits how much data you can send down the wire. 200Mhz may seem like a lot, but it’s not that much when you are trying to multiplex 20 computers on the wire from a local hub or distribute a bunch of HDTV channels, or run GHz ethernet.
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Attenuation. Cat-5 usues small twisted pairs, and has a fairly high amount of attenuation, especially at higher frequencies. You can transmit VGA or baseband video over Cat-5, but the maximum cable length is only about 1000 ft. So you won’t be running Cat-5 from your cable company. And that 1000’ is an optimum length. Throw in a few connectors along the way, and you might see signal degredation at much shorter distances. HDTV signals are only good for a couple of hundred feet at best, and if you’re running video at 1600 X 1200, you’ve got serious problems with Cat-5.
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Installation issues. Maintaining the Cat-5 standard throughout an installation is not easy. You’re only guaranteed Cat-5 level performance if you meet all the requirements for bend radii, maximum distance of untwisted wiring at the connector, proper wiring arrangement in the conector, maxmum pull stress on the cable as its being fed, etc.
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Environmental issues. Cat-5 is unshielded twisted pair. In a noisy RF environment, this can be a problem. You can get shielded Cat-5, but then you’ve got a different wire type. Plus, Cat-5 is relatively fragile cable. It’s easy to damage it. Compare a cat-5 cable to something like an RG-6 quad-shield for these issues.
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You need different types of wire anyway. There are different grades of Cat-5. Some is plenum rated. Some isn’t. You need stranded Cat-5 for patch cables, and solid core Cat-5 for infrastructure wiring.
A lot of people make patch cables by using solid-core cat-5 left over after running in their walls, but I wouldn’t recommend it. The solid core stuff is not nearly as flexible, and the wires are prone to cracking if they are flexed too much (as they are when they are coiled up behind a computer, kicked, unplugged and plugged back in, etc). And patch cables with small cracks in the wiring are a pain the ass to troubleshoot. They can work intermittently, or just degrade performance, or be susceptible to noise, or all kinds of things. Just buy stranded patch cables. They’re cheap.
Anyway, compared to the labor required to install wiring, the cost of the wire itself is secondary. So just use the right wire for the job. I pulled two quad-shield RG-6 cables and two Cat-5e cables to every room in my house. The RG-6 is for video, the Cat-5 for data.