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There are a number of technical differences, involving the number of twists per inch on the conductors, the capacitance per linear foot between members of a pair and between pairs, and in the propagation speed of electricity along the cable. In practical terms, the category determines the fastest network that can use the cable at full speed.

Category 3 cable was originally used for telephone lines. It can be used with 10BaseT networks, twisted pair with a highest speed of 10 megabits per second (10Mb/s).

Category 5 cable has a guaranteed number of twists per inch on the two pairs (of four) that actually carry the data. It is rated to carry data on 100BaseT networks, up to 100Mb/s.

Category 5e cable has a slightly lower capacitance per linear foot, which results in its being able to handle data speeds up to 300Mb/s, and larger packets on 100Mb/s networks. It can be used on 1000BaseT networks, but most such networks will detect the lower-spec cable and derate themselves to 300Mb/s, and sometimes disable "jumbo packets", as the network hardware determines that the cable can't carry data at speed without corruption.

Category 6 cable has a higher number of twists per inch on all pairs, and a lower per-foot capacitance rating. It is able to carry data on 1000Base-T networks, up to 1000Mb/s, or one gigabit per second (1Gb/s).

There is, at this writing, no formal specification for Category 7 cable. In theory, it should be able to support 10,000BaseT, 10000Mb/s, 10Gb/s. However, there are few networks available yet that put 10Gb/s on copper, and there does not yet seem to be a standard for what sort of cables are needed to handle that data speed reliably.

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Q: What is the difference between cat 3 and cat 5 and cat6 and cat7 cables?
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