Even though our terrestrial HDTV is bad quality (576p, go figure), I think New Zealand is viable to have terrestrial HDTV. Letting Sky having a monopoly on HDTV would lead to something like this, so terrestrial HDTV could give fairer competition in the market.
You're light years ahead of us, Foxtel Digital still hasn't introduced HD channels. :\ Let alone, you can't even get Channel 7 and Channel 10 on digital, just an analogue rebroadcast. :\
/http://www.stuff.co.nz/stuff/0,2106,3697268a11,00.html
Though many consumers have been told new sets are HDTV-ready, they will not work without a key component ? an anti-pirating device. The internal hardware protects programme right-holders from unauthorised showing or copying and must be in place before shows can screen. Consumer Affairs Minister Judith Tizard has met Sky bosses about the issue and the ministry is investigating.
Consumer Electronics Association executive officer Garth Wyllie said representatives agreed action was needed.
The association planned to spearhead an update of six-year-old standards to ensure future televisions sold as "HDTV-ready" had the anti-piracy component.
Why should you care ??
NZ is often used to test technologies for the rest of the world, We have a small population (4 Million) and tend to early adoption. SKY supplies Pay TV to 40% of the NZ population. If we adopt this the set with it will be all you can get in a few years.
SO much for the agreement not to use it for some time, Looks like that's a US situation only.
Cos its coming Here with full Government, Broadcaster, and Supplier support. All we Kiwi's can hope for is that people refuse to Pay for it the way it is? But they probably won't know anything about it.
Looks like its time for a Hack solution.

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic