If OTA is no longer necessary, then, why (less than six months ago) did Congress pump millions of dollars into the digital conversion in order to make sure people could still use OTA?
(because they are idiots is not an acceptable answer).
Analog TV could not be packed, channel next to channel due to original design of transmitters. DTV can, as long as adjacent channels are in the same direction and roughly the same power. If the original plan was to get rid of OTA, they needed time to pick OTA's bones a few MHz at a time. They had to do the converter boxes to fool people into buying into the program. It was a total waste of money, but is it that much in the grand scheme of things?
Satellite will be happy to provide some form of TV to rural. As soon as locals go off the airwaves, cable and satellite will claim they don't have to be carried. I can see a lawsuit with the FCC as how can a provider be required to carry an internet feed, when there are hundreds of internet feeds in local areas? Just because they were a former TV station won't cut it with the courts.
With dramatically reduced viewership, many local channels will simply go out of business because of lack of ad revenue. That will cause the loss of syndicated programming, as they can't make money. Some programming will go to ppv internet downloads, some will die.
The networks will become cable channels at best. With reduced viewership, will ABC, and CBS continue to have a network news operation when they are competing with a dozen other well established 24/7 cable news channels? I assume NBC news will fold into MSNBC and CNBC.
The dramatic reduction in local channels means that there will be a lot of extra space on satellites and cable for additional services. The only issue is that the satellite companies have spent billions of dollars in putting up spacecraft to supply those 1000s of local channels mandated by the FCC. they might be upset with the FCC and want some sort of compensation.
Finally, there will be an issue of not having the ability to get disaster warnings, school closings, etc out to people if there are no local channels anymore. I can see the government mandating software installs on our PCs to ensure we get those alerts (shades of the Chinese, wanting internet filters on their people's PCs), or the government run internet will inject the warnings in our web pages.
It's going to be a rosy future.