I did video production for a TW cable affiliate back on the mainland in the 90s. We had a similar thing going on. The local broadcasters were starving for cash, and decided that they could use the cable company to supplement their revenue. Instead of opting for the then-Federally-required "must carry" option, they decided instead to charge the cable company. TW, of course, resisted the idea of taxing their subscribers for access to a free broadcast, arguing that the broadcasters benefitted greatly from the increased exposure being on the cable system provided them. TW also stocked up on rabbit ears and A/B switches, and were prepared to distribute them to all subscribers for free.
In that case, the broadcasters blinked. TW offered them some increase in free local insertion ads, but no payment.
It's absurd, really. Especially in this market, where cable penetration is over 90%, and geography prohibits decent broadcast reception, for a broadcaster to take this stance. While some percentage of the population will probably switch from cable to satellite just to watch KITV, most won't, and KITV will simply lose over half of their audience. Ratings will reflect this, advertise ring revenue will plummet, and KITV will find itself in a pretty bad place.