I've suggested that the Feds just begin a transition to all Satellite for locals. Buy back the portion of the spectrum that's used for locals, from the satellite companies, and give it to the broadcasters in place of the terrestrial frequencies.
Let the satellite companies still operate the ground and space facilities for a while, until time for new satellites and uplinks.
As we move forward, eliminate the need for two HD and two SD feeds (both DISH and DirecTV), and free up more spectrum for the satellite companies and the broadcasters. Make all new satellite boxes HD-capable.
The locals would be available to anyone in the particular DMA, for free, but would be tightly spot-beamed....maybe even scrambled, if necessary (to control out-of-market reception). make it possible for non-subscribers to purchase FTA receivers for local reception.
As things progress, let the local stations get together and build or purchase their own local POP, and uplinks. They could hire (on a national basis) the DBS companies, or someone else, to build, launch and operate the Space Segment and TT&C facilities.
With the local stations being the ones who send the signal, there is no need for retransmission fees. Even Cable subs could receive the terrestrial broadcasters' signals via a dish, and the Cable companies could use their bandwidth for broadband.