The problem with Rupert Murdoch's proposal to create an online news consortium, in which major publishers would all band together to put their news content behind pay walls (L.A. Times, 8/21/09), is that it's not illegal to discuss news events online. And you don't want to make it illegal to discuss news events online.
And yet, absent a law forbidding such discussions, there's nothing to stop someone from buying subscriptions to the various pay news sites and starting a website (like this one, but more so) in which they write about what they've learned from them–thus offering for free what the Murdoch's news trust would be trying to get people to pay for. You can't copyright facts, and any attempt to change the law to allow publishers to do so would run straight into the shoals of the First Amendment and the concept of democracy itself.
Let's say you could keep the "tech tapeworms in the intestines of the Internet" (as a Murdoch editor memorably calls them) from passing along the news for free. According to the L.A. Times piece, News Corp points to the Wall Street Journal as a success story with its website's 1 million paying customers, and has encouraged the New York Times Co., Washington Post Co., Hearst Corp. and Tribune Co. to follow its lead. Imagine that each of those publishers was as successful, and that the paying readers they attracted did not significantly overlap (both rather unrealistic assumptions, it strikes me)–that would be great news for publishers but something of a disaster for democracy, with the news generated by these leading (and not-so-leading) outlets confined to an elite audience of 5 million–or roughly 1-2 percent of the citizenry.
It's not like we have a particularly well-informed electorate as it is; if Murdoch's plan for an online news cartel is at all successful, though, today's voters may seem like Encyclopedia Brown.