Close... Ethernet is isolated through magnetic transformers on both sides, so any existing common mode noise or DC voltage is removed leaving only the AC data s

Close... Ethernet is isolated through magnetic transformers on both sides, so any existing common mode noise or DC voltage is removed leaving only the AC data signal. PoE (the standard, 802.3af/at) works by injecting DC power after the transformer on one side, and removing the DC before the transformer on the other side and using it to power the device. There is also a signaling mechanism to make sure the end device is PoE-compliant. Passive PoE as seen in the article simply takes out the two pairs of Cat 5 that are not used for data transmission, and uses them for power. It works in a pinch, but more caution is required to ensure the voltage injected is compatible with the device, there is not too much voltage drop in the cable, and there is not too much current going into the cable. Also, since these pairs are used for gigabit data, this method cannot be used with 1000baseT.