Although they could always lease another transponder (and they could do it on a different bird if they had too), which would give them the room... I think they are able to provide Distants in HD, they just choose not to do so... But someone may have more solid information...
But if the OTA is MPEG-2, and they need MPEG-4 to fit onto the transponder, wouldn't they have to re-encode the signals into MPEG-4, like Dish does?I believe they got the uplink facility also. The sats are "bent pipes" - they can pass any encoding- MPEG2, MPEG4 or whatever.
I hope that I get this correct. I believe that E* gets 12 SD channels per TP. NPS is leasing 2/3 of a Conus TP for 8 SD channels. E* currently gets up to 4 HD channels per TP. NPS would have to lease an additional 2 Conus TP's to have 8 HD channels. I don't know what the cost of that would be.