When I connect my tv via network cable to the computer modem, why is there a decrease in picture quality?

You come off the cable coming from the street to a good quality 2-port splitter. Modem goes on one port, any TVs go on the other port (via another splitter if you have more than one - DO NOT use a single multi-port splitter). If you don't get enough TV signal that way, call your cable company - they have to feed you more signal.