local channels are not 'taken off the air' they are sent by fiber optic cable to comcast's servers to encode. the 1080i broadcast is approx equivalent to 1/2 of that say 540p due to how the image is made and the 'frames' show much motion artificacts. 720p is quite good for cable. point is that it isn't a downgrade.
Equating 1080i to 540p is misleading. A 1080i picture will look much better than 520p even if the overall bitrate is the same because of the resolution. Saying a 1080i video that’s converted to 720p is somehow an upgrade is just wrong.
While that’s a nice video describing the differences between interlaced and progressive video, it’s also irrelevant as the source video was never 720p to begin with.
Modern TV’s do a very good job a deinterlacing video because the “missing” frames can easily be reconstructed so a 1080i will look nearly as good as a 1080p.
Converting a 1080i video to 720p requires transcoding the video which Comcast does in real time. In order to do so they use a constant bit rate no matter what the scene. This is why scenes with motion of a lot of small things (like confetti) look like a blurry mess on Comcast.
Now after the video is 720p your TV has to scale it to its native resolution. I don’t know anyone who has a 720p set anymore so the video will need to be scaled back to 1080 or 2160 (double 1080). That’s an additional change to the video.
So basically with Comcast’s current setup video goes from 1080i to 720p to 1080p/4K rather than 1080i -> 1080p/4K. That’s an extra real time transcoding and scaling step that adds degradation.
That’s before you take into account that the bitrate given to the 720p channels isn’t nearly high enough to play pre-compressed 720p video, let alone real time transcoded 720p video which means Comcast has to run the video through a smoothing filter to lower the details so it doesn’t look like a pixelated mess.
TLDR it’s a degradation.
the fiber-fed signal is sent in HEVC (wrongly called mpeg5) video stream. 1080i is not received nor used by comcast. Comcast takes the progressive video stream from the fiber and transcodes it in real time as needed for cable (720p) and SD digital as well as various resolutions for streaming clients. nothing is 'degraded' we are just discussing off the air vs fiber fed progressive (digital) video delivery.
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