By Scott Moritz

Cablevision’s Dolan family is weighing its options again. But while the chilly credit market puts some boundaries on the scope of the Long Island cable company’s options, some of the more likely moves include a dividend and a spinoff of its Rainbow Media unit, say analysts.

“We arrive at the view that given the current state of the credit markets and $1.7 billion in maturities [Cablevision faces] next year, the company’s options are fairly limited,” Goldman Sach’s analysts wrote in a research note Tuesday.

Shares of Cablevision (CVC), the No.6 cable provider, shot up 7% Tuesday on word that the company was exploring moves to enhance shareholder value. Holding about 20% of the company’s stock, the Dolan family has a keen eye on trying to extract more value for the stockholders. The Dolans have made three failed bids to take the company private, but with the lack of big financing available at the moment, another take-private move is probably not in the works.

Most likely is the sale or spin off of Rainbow, the holding company behind TV programming including AMC, WE and IFC. In February, the Dolans were shopping the media unit around but target buyers like Liberty Media (LINTA) didn’t bite.

If Cablevision and its bankers can’t find a buyer for Rainbow, the company may spin the unit off to shareholders and, with the sale, toss in new debt to finance a dividend, say analysts.

“We believe the company could institute a regular dividend on the order of $1 per share,” Goldman’s analysts say. The $1 annual dividend would be within reach, costing Cablevision about $280 million, or 34% of the company’s free cash flow in 2008, according to Goldman.

A bigger special dividend is less likely since the company would have to seek financing to make a sizeable one-time payout.

The move comes as Cablevision, along with Comcast (CMCSA), Verizon (VZ) and AT&T (T), all face increasing expansion costs and cutthroat competition.

By Michal Lev-Ram

Couch potatoes, listen up: If you’re still using an analog TV, you might find static instead of “American Idol” on your screen come Feb. 18, 2009. That’s when the Federal Communications Commission plans to end a half-century of analog broadcasting.

This is the final step in switching to digital television broadcasting, which takes up less bandwidth and allows for high-definition pictures. With the government’s auction of the old analog TV spectrum now completed — companies like Verizon Wireless (VZ) and AT&T (T) bid billions of dollars those airwaves, which are well-suited for mobile broadband — attention is focusing on the 11.4 million U.S. households that Nielsen estimates are not ready for the big switch to digital television.

The only way consumers can keep their old televisions is by paying for cable or satellite service or buying a converter box, which receives and converts digital signals into a format that analog TVs can display. To make sure these analog-only households aren’t stuck without programming next February, the government has launched a coupon program to make the transition to digital smoother. Qualifying families can apply for up to two, $40 coupons to be used toward purchasing converter boxes.

Todd Sedmak, a spokesman for the National Telecommunications and Information Administration, the government group overseeing the coupons program, says companies in the broadcasting, cable and consumer electronics industries have committed to spending over $1 billion to educate consumers about the upcoming change.

“Many resources are being tapped to inform the public,” says Sedmak, who adds that more than 4.5 million households have already requested about 8.5 million coupons. To date though, the government has only mailed about 2 million coupons.

Critics say despite the efforts to educate, getting the word out to over 11 million people — many of them living in rural locations — will be difficult. They also argue that converter boxes are not readily available and that that the coupons are good for only three months. Best Buy (BBY) carries only one model, retailing for $60, that is covered by the coupon.

What’s more, the upcoming switch could affect some groups more than others. According to a recent Nielsen study, adults over 55 are better prepared than younger households, while Hispanics and African-American households will be more affected than whites and Asians.

Eric Rossi, head of Nielsen’s digital transition preparedness team, said in a recent report: “The change to all-digital broadcasting is the most significant change in the history of television.”