Don't give up so easy. I cut cable about 2 years ago myself, and go with Netflix (4 screens) and Hulu+. TV monthly expense- $20.
KORTv is subscription that you'll get on ATV- if you have problems with accessing it, it's probably as simple as putting back in username and password. You can leave that with your parents.
As for news and major networks. I have a $20 HD rabbit ears antennae- I've lived in 2 major networks over the last 2 years, and in one (Califonia) got over 30 channels (OTA- again, over the air) including ABC, NBC, CBS, and FOX and in the other (Texas)- got the same major networks as well as about 20 more stations. Funny thing people find out with OTA, the HD quality is better than with a cable box.
Your goals seem pretty basic, unlike others cutting cable (pro and college sports are the hardest to get without a cable package, BUT doable), you want KORTv (on ATV- Apple TV) and local channels- again, $20 rabbit ear antennae that connects to coax port on TV. You would simply go between "inputs" on the TV (either HDMI for ATV to TV input and use TV remote to go to channels).
If ATV isn't working right, than maybe you send it back to Amazon for a new one.