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(1) Should I start out with a passive splitter or am I going to need a powered unit?
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Based on your description, a 4-way passive splitter should work.
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(2) Does it matter where the splitter is located? I am thinking to run a single antenna lead from the antenna straight down into the basement and split the signal from there. As an alternative, I could shorter the distance from the antenna to the splitter by splitting the signal in the attic and run to the TVs from there. However, more total cable will be needed for this second option.
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Try the easy way first, because there isn't much difference in the lengths. In cases where there is one very long run, two short runs, and one medium run, it is possible to use a cascade of 2-way splitters to send a stronger signal to the long run.
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Do you mean that if you use a preamp, that the preamp'ed signal can become overloaded by the strong local signals?
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The preamp and/or the tuner can be overloaded.
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What is the result? Does it just degrade the local signals? Does it block the distant signals?
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As the local signals get stronger, you lose the weak signals first, then even the local signals are lost.
If there isn't too great a difference in strength between the strong and the weak ones, it is often possible to add just enough amplification to receive the weak ones without having overload from the strong ones. In cases where the difference is too great, it is necessary to use separate antennas, amplifiers, and custom filters; very expensive.
THREE TYPES OF OVERLOAD
There are three types of preamp or tuner overload, in order of increasing signal strength:
1. The strong signals almost cause enough intermodulation distortion (IMD) to interfere with the reception of weak desired signals, but the spurious signals are at or below the noise floor of the weak signals. This is the point that holl_ands uses in his preamp charts to obtain max SFDR (Spurious Free Dynamic Range). No damage will happen.
As the strongest signals continue to increase in strength, more of the weaker signals are damaged until you reach:
2. The strong signals cause overload to the preamp or tuner that makes it impossible to receive any signals. No damage will happen. The strongest signals are still there, but they can't be decoded because the IMD products have damaged them so that they contain more errors (high BER....bit error ratio/rate) than can be corrected by the FEC (forward error correction).
3. The signals are so strong that the input transistor is toast. You are not likely to encounter OTA signals that strong, unless you live next door to a high power transmitter and you have your high gain antenna aimed at the transmitter's antenna.
As a general rule, tuners can tolerate stronger signals than preamps before overload. The difference in strength is approx. equal to the preamp gain.