Obviously for the news agencies, their hope would be that Google be somehow forced to pay them for access and not be allowed to shut down the service. Of course, it's hard to imagine how the government could require Google News to operate as a service.
The thing that's broken here is that in any other content situation like movies or music, the content is unique and copyrighted. If you want Katy Perry or Star Wars, you have to deal with the companies with rights to those, and the MPAA and RIAA are formidable industry associations which can swing a lot of weight and force a negotiation. If you want any "music" at all, really, you have to sit down with the RIAA.
News, however, can't really be copyrighted that way, since fact can be restated by anyone. It's fair use. In a traditional situation, all the affected corporations (like every major news org) would band together and set the bar for negotiation. Someone like Google would have to comply or lose out on a lot of information to base their services on. However, in the case of news, Google has an infinite amount of blogspam to feed off of that is cannibalizing and resharing the news from journalists. Google wouldn't be hurt enough by news agencies blocking them, at least, compared to how much it would hurt news agencies to not be distributed by them.