Inside Story - The information war

"America is facing an information war...and we are losing that war."

That's what US secretary of state Hillary Clinton said as she spoke before the Senate Foreign Relations Committee. A war she says is being won by networks that offer what she described as "real news".

She praised Al Jazeera, saying it's changing peoples' minds and attitudes. Her comments came as Republicans plan to cut the state department's budget by half.

Is the US really losing the information war? And is public funding the solution?