In most ways today's media landscape is more vibrant than ever, offering faster and cheaper distribution networks, fewer barriers to entry, and more ways to consume information. Choice abounds. Local TV stations, newspapers and a flood of innovative web start-ups are now using a dazzling array of digital tools to improve the way they gather and disseminate the news -- not just nationally or internationally but block-by-block. The digital tools that have helped topple governments abroad are providing americans powerful new ways to consume, share and even report the news. Yet, in part because of the digital revolution, serious problems have arisen, as well. most significant among them: in many communities, we now face a shortage of local, professional, accountability reporting. This is likely to lead to the kinds of problems that are, not surprisingly, associated with a lack of accountability -- more government waste, more local corruption, less effective schools, and other serious community problems. The independent watchdog function that the Founding Fathers envisioned for journalism -- going so far as to call it crucial to a healthy democracy -- is in some cases at risk at the local level. This report looks not only at the changing face of media, but at the relevant policy and regulatory situation, including the FCC's own track record. Our basic conclusion: with the media landscape shifting as fast as it has been, some current regulations are out of sync with the information needs of communities and the fluid nature of modern local media markets. In crafting recommendations, this report started with the overriding premise that the First amendment circumscribes the role government can play in improving local news. Beyond that, sound policy would recognize that government is simply not the main player in this drama. However, greater transparency by government and media companies can help reduce the cost of reporting, empower consumers, and generally improve the functioning of media markets. and policymakers can take other steps to remove obstacles to innovation and ensure that taxpayer resources are well used. It is a confusing time. Breathtaking media abundance lives side-by-side with serious shortages in reporting. Communities benefit tremendously from many innovations brought by the internet and simultaneously suffer from the dislocations caused by the seismic changes in media markets. Our conclusion: the gaps are quite important, but they are fixable. In other words, we find ourselves in an unusual moment when ignoring the ailments of local media will mean that serious harm may be done to our communities -- but paying attention to them will enable americans to develop, literally, the best media system the nation has ever had.