That's why the more diverse sources of reporting there are, the better. Readers can read different reports which focus on different details and make up their own minds based on the whole. Unless of course they want to be spoon-fed a headline and two-sentence summary and sound bite of outrage, then they can watch Fox News.
Incidentally I work as a newspaper reporter, and I think this senator's idea is great. So I am clearly declaring my bias.
If diverse sources of reporting are conglomerated into fewer and fewer media sources (look at Canada as a micro-example, there are two companies controlling most of the daily newspapers across the country) then variety suffers. If this continues, as it will if corporatism dominates media through buyouts, bankruptcies, etc. then there will be very little diversity. You will have, essentially, what existed before the advent of the printing press - only the wealthy could afford to have anything recorded, so the they got to write history.
The wealthy have often controlled the press (e.g. Hearst) but in the 20th century there were a wide variety of "slants" in print because it wasn't too hard for someone to round up investors, or start a non-profit and create their own publication. Today ownership of or access to a colour press capable of doing magazines or newspapers is prohibitively expensive and the biggest problem is the business model is broken. Few people want to pay for what they read, so subscription revenue is down, and advertising revenue is drying up.
Yes, the Internet will change everything but no big media companies have found a way to make money off Internet-based publications on the same scale as their print products. And no one is going to pay to subscribe to a news website, that's been tried several times and in my opinion it will never work on a large scale.
To bring my ramblings to a close, I think this senator's idea is great because it could pave the way for independent, Internet-based publications to thrive, providing news to niche markets, and as non-profits, they could solicit donations from loyal readers. That could be enough to allow investigative journalism to thrive again, and to allow small, independent publications to grow and thrive by the quality of their work, instead of by virtue of being the biggest game in town.