I thought the issue that cable operators must carry local broadcast HDTV signals was settled, but it turns out it's NOT settled, and both the broadcasters and cable companies are still fighting over this important issue.
The FCC, Congress, and the Supreme Court have ruled that cable operators must carry local broadcast signals. Seems simple, but it's not. Cable companies say the rules don't force them to carry both of the local broadcasters analog and digital signals during the transition. The cable operators also say they don't have to carry all the new minor digital channels from local broadcasters, nor do they have to carry the full HDTV signal from a local broadcaster. According to the cable companies, the rules allow them to downgrade an HD signal to standard definition. Understandably, the local broadcasters don't agree.
To make things even more complicated, the rules allow the local broadcasters to give the cable company one of two must carry ultimatums:
Option 1: You must carry my signal at no cost to me.
Option 2: You must pay me to carry my signal, otherwise you can't.
The first option works great for small local broadcasters, the second works great for the big local broadcasters.
Under either option, the cable companies must transmit the local broadcasters digital signal unencrypted. However, you can't connect an OTA HDTV tuner to cable and get a picture. HDTV is broadcast over the air and through cable using different modulation schemes.
Here's some info I found on QAM and HDTV:
Cable uses 256 QAM (quadrature amplitude modulation) to form the digital bitstream in the cable. Broadcast HDTV uses 8VSB (vestigial side band) to form the waves in the air. Each method works perfectly for its transmission environment (e.g., error correction), but the two modulation schemes are incompatible.
So it seems the only way to be sure you can get all of the digital channels offered by your local broadcasters is to either get an OTA settop or a TV with both CableCard and ATSC digital tuners built in.