I remember when they first came out with this information the plan then was to offer SD locals. What do they plan on doing now? One obvious way for them to go is to offer regional HDTV sports networks. HDTV locals are probably out of the question given their current marketing.
The satellite has spot beams and they are supposedly able to move them around. The satellite was designed to be very flexible in case they had to sell it. During the merger they were showing if they got all of 61.5 they could do LIL via spot beams.
Right now they do not really have enough transponders to use the spot beams at all. Remember you cannot reuse the same frequencies on adjacent spots, so it takes 5+ transponders to really utilize spot beams. I think they can use up to 7 transponder frequencies in their spot beams (seems like I read that somewhere). With only 11 transponders, they cannot afford to have half of them doing spot beams. By contrast Dish has 10 of their 50 and Direct will have 12 of their 46 doing spot beams.