Indeed. Listen up all you MIT kids: do you want to be cooler than Mark Zuckerberg, or do you want to be cooler than John McCarthy, Tim Berners-Lee and Captain Crunch all rolled into one?

How do you pay for it?

I have a team of capable engineers, and relationships with network/wifi hardware/firmware developers. What I don't have is $2-10M to spend designing open protocols (and building the software), especially with no obvious commercial upside.

No idea, but that doesn't mean it can't be done either non-profit-wise or even with significant upside, it's just your chances of VC-money and selling to a major corporation for fuck-you money are diminished relative to TechCrunch friendly buzzword related startups.

Non-profit might be the best way to go, here. I'm sure you can wrangle up enough in donations and FOSS contributions to make it work. The idea of an Internet free from political and legal malfeasance is one whose time has come, and enough people are realizing that fact that there should be sufficient collective energy to move a well-designed system forward.

Kick-starter? I'll pitch in just to see a decent (and open) white paper come out of it.