A “distant signal” is a broadcast signal you cannot receive off the air (with a “rabbit ears” antenna), because you’re too far away from where the signal originates. Expressed another way, a local signal can be defined as one that is within a radius of between 40 and 60 miles of a transmitting broadcast antenna depending on its transmitter’s strength.
Distant signals originate as over-the-air signals and then are picked up and retransmitted as part of the retransmitter’s basic programming package (like basic cable). That means that programming that originates on specialty and pay television services (like Discovery, ESPN, and TBN) does not generate retransmission royalties.