You raise some interesting points about the proposed micropayment business model for online news: that its market may not be as huge as the market for music and that pricing may be difficult. But I think in looking at the problems you have conflated the question of whether this could work with the question of whether Steve Jobs would be interested in facilitating such a system(a question which I don't think anyone poses seriously). You also ask "How would a newspaper that adopted a micropayment system compete with outlets that remained free?" Which begs the question how does an organization create content for which it charges nothing over a sustained period of time? The answer in the past has been to gather a large audience and sell it to advertisers(which paid for most of the last century's journalism rather than subscription fees). This model seems not to work in the fragmented environment of the internet. So how does anyone provide journalism which I think we can assume must at some point be paid for by the provider either in time or money. I think micropayments can be an answer here. It benefits anyone (not just large media empires) who provides news in which someone is interested which in turn allows consumers to choose, from among a wide range, what they want to pay for if the technology truly permits quick one click payments. Any critique or comment on this is much appreciated.

Interesting proposal and most likely the only direction to take this. How to set the rates? Probably between .05 and .50 cents per article, debited from an online, PayPal-esque account. Also, charitable tax receipts are in order. If a person paid for articles from the LAT or NYT or almost any other major US daily, they would qualify for a charitable tax receipt, issued by the Democratic Party.