I once worked for a cable-TV company that offered to remove a customer's rooftop antenna whenever they installed cable-TV service, so the headline, "Cable-TV Promoting Antenna TV" sounded like "Man Bites Dog" at first glance, but it makes perfect sense in 2007. Here's why:
Over a decade ago, in a rewrite of telecommunications law in the U.S., cable-TV companies were required to pay "retransmission fees" for carrying over-the-air broadcast TV stations -- that is, for carrying the major networks (ABC, CBS, Fox, NBC and PBS). But rather than pay those fees, most networks and their local affiliates worked out deals whereby cable companies get the big networks for free by agreeing to carry smaller cable-TV networks owned by the same parent company, such as getting MSNBC and CNBC carried in exchange for free NBC.
Now, as these contracts come up for renewal, that's all changing. CBS recently announced they've made deals with a handful of cable systems that will result in millions of dollars of retransmission fees in the next year. And after 2009, when their contracts with the biggest cable companies come up for renewal, CBS CEO Les Moonves recently said he expects these revenues to climb to the hundreds of millions, with fees (to cable companies) of fifty cents per subscriber per month becoming common.
So you can see why the cable industry would seek another way to avoid paying these fees, and the arrival of DTV broadcasting couldn't be timed better for them.
Although cable-TV in the U.S. had its roots in the 1950s and 60s as a "community antenna" (catv) for rural and fringe reception communities, fifty years later the vast majority of cable-TV subscribers live in areas that get perfectly adequate over-the-air TV reception. In some cases, the signal might have static or have ghosts, but those are exactly the problems digital TV (as opposed to analog) eliminates. So if a cable-TV subscriber can get DTV reception, it will look as good as the cable-TV signal.
The cable-TV company can thus combine the DTV over-the-air signal with their cable-exclusive channels (ESPN, CNN, Comedy Central, HBO, etc.) and provide the customer with a seamless experience combining the two signals.
It's not exactly an original idea -- the satellite-TV industry has been taking stabs at this for years, combining local antenna signals with nationwide satellite signals. But mixing analog TV and digital satellite-TV provides a somewhat different user experience, and that's what motivated the satellite companies to ultimately re-transmit local signals by building satellites with regional spot beams.
Now, the cable-TV industry, by embracing DTV just when the public is confused and the converter box issue has percolated, is in a unique position to really stick it to the big TV networks and the broadcast industry, while ironically embracing them and depending on them all the more.