After broadcasters stop transmitting in analog, cable operators will have two signals to work with: digital standard definition (SD) and digital high definition (HD). Neither will work with analog TV sets, which the FCC estimates are still in use in 40 million American homes. After yesterday's ruling, cable operators will have two choices come February 2009. They can either convert the digital SD signal to analog SD and pipe it across their lines (which means using more bandwidth and carrying three versions of a single channel) or they can offer digital SD only and roll out converter boxes to all their subscribers (which could be expensive).

It's not quite that bad. The entire article is here: http://arstechnica.com/news.ars/post/20070912-fcc-to-cable-you-must-support-analog-tvs-until-2012.html

The two alternatives are not especially costly. Conversion of digital SD to analog SD requires an RF modulator costing less than $100 per channel. The same type of equipment is used today to display computer generated video on analog TVs.

Distribution of SD digital is how most "Digital Cable" works today. If you have such digital cable, you have a converter box for your TV already. Instead of performing A/D conversion from the analog broadcast signal, one would distribute the SD digital feed already present in many HDTV signals on digital subchannel 1.

Note also that these solutions are easy and cheap enough that the cable providers are applauding the FCC decision. Speaking for myself, I am disappointed that the analog hardware will have an extended life.

Please see this thread http://www.avsforum.com/avs-vb/showthread.php?t=906927

We already have a thread about this topic.