Why did congress set it up? Think about this?
The 1992 Cable Act set up the must-carry; and it's intention was to help get smaller ignored broadcasters on to cable systems with the must-carry provision. The retramission consent was probably foresight. ATSC was working on HDTV standards at that time (which, if you ask me were at least 10 years too early); 8VSB and COFDM were modulation methods looked at. For some odd reason, the FCC adopted 8VSB even though it's technically inferior to COFDM. 8VSB does not handle multi-path very well, if at all. This is a problem just about everywhere, signals bounce. You live in the city, you get signals bouncing off buildings. You live in a rural area; you got signal bouncing off the ground, trees, etc. Why would you use a system that breaks down at the first little reflection?
Those in power knew that 8VSB modulation, in the long run; would cause OTA TV to fail. You'd get a small percentage of people who got signal; but people who used to get marginal reception don't get it at all. I used to get locals with an antenna; but with all the trees around my house it's no point. I get great signal levels, sure; the problem is the amount of multipath and signal degradation is so severe it's not usable.
Maybe that's not true...but the fact is; we're using a modulation system that's outright garbage. Majority of people can't get quality reception without expensive antennas or shelling out a lot of money; the day of putting rabbit ears on the TV are largely over. Create a system where people have to switch to a provider, then double-dip on the profits.
The fact is, no one was sure whether it was legal or not...till the networks got involved. Plain and simple..
Up next on the chopping block are going to be multi-room DVRs, Slingbox technology, and probably anything that delivers video to your computer. The judgement was not very clear on an even less clear law; and "past-precedent" will be used to get all kinds of new technology illegal.