> Cloudflare and Google pay ISPs for the latency they get, FWIW. If I made my own resolver service today I would not be able to compete with your ISP without forking over $$$.

I think the main reason for this is even if your competitor grew like a weed, it would be a decade or two before you had the scale to justify rolling out a CDN/caching infrastructure like that of cloudflare. That's not a matter of simply paying ISPs money.