I'm very hesitant to support any attempt of government to regulate the content of the internet. I think, on the whole, that the internet is best served as a sort of information anarchy. It's really the ultimate example of truly free speech (even when it's illegal).
Of course, people will always be lied to, misled, and outright deceived. But, let people build their own defenses against that. On the whole, I think it's better to keep government as far away from the internet as possible.
This is overdue, actually. U.S. consumer law already governs paid word-of-mouth marketing, as it is a form of advertising. (It is commercial speech and not fully protected by the First Amendment.) It is a reasonable standard to say that paid bloggers can't make false commercial claims about a product, and that they disclose situations where they are compensated.
How about the FTC forgoes doing this and tax payers can just save the money? I'm not sure we need a nanny to tell us some emo blogger kid is getting a fat check from Sony to review their latest gadget.
Of course, people will always be lied to, misled, and outright deceived. But, let people build their own defenses against that. On the whole, I think it's better to keep government as far away from the internet as possible.