Bit silly, no?
1) There's no point comparing our TV market to that of the USA. The USA is huge, the concept of 'local' there is on a scale entirely different to our own.
2) Is there really a demand for services that are massively local to them? Because the decline in local newspapers doesn't prove that there is.
3) We already have local radio stations, both in the massively funded local BBC stations, and in community radio. And no one listens to community radio, because it is amateur and rubbish. Just like the local TV will be.