What is needed is for the sat companies to pick up the local news channels.
Yeah there is a few of those. Although they are mostly just repeats of the same news show over and over and over and over and.... well you get it. They repeat the morning news till noon, then they repeat the noon news till 5, then they repeat the 5-o'clock news till 11, and then they repeat the 11 o'clock news till early morning. Not so sure it is worth it to give up a local spotbeam spot for those.
Most local news broadcasters also allow you to watch all of their news content - albeit mostly in bits and pieces, but this does allow you to choose which parts you want to watch - online through their website.
What would be a cool addition is local news on-demand through the current on-demand system, that connects - perhaps based on zipcode - to a local news feed for some of the local news shows.