How do you square this viewpoint with the fact that the heart of the Internet was developed by the U.S. government, using public funds?

All the core work for what eventually became the Internet was done by the Defense Advanced Research Projects Agency (DARPA) in the 1960s and 1970s in the process of building the ARPAnet. The Internet was an extension of ARPAnet that allowed networks controlled by private operators, like the telecoms, to link up to it by using a standard protocol — TCP/IP, also developed using government money (from DARPA to Bolt Beranek & Newman). These operators connected their networks to the Internet in order to profit from the investment in interconnectivity made by DARPA.

In other words, the telecoms put no real money at risk in the venture. They spent money to lay cable, sure; but they did not do the R&D to connect their networks together — that work was done under goverment contract, using taxpayer funds. Had it not been done, the telecoms would likely still be merrily chugging along with non-interoperable systems — or systems with limited, fee-encumbered interoperability. This might have been a tidy little business for them, but it would in no way resemble what we know today as the Internet.

Given that U.S. taxpayers essentially presented the telecoms with this enormous opportunity to profit, why should they not have an interest in ensuring that its core principles are respected by all comers? Ford doesn’t get to set its own special speed limit for Ford cars on public highways, after all.

“If you are not willing to do this, then prepare to fund a parallel public infrastructure.”

We already did that; it’s called the Internet, and the telcos have chosen to connect to it. If they don’t like how it operates, they are free to put some money at risk, build their own network, and run it how they want. Just don’t call it the Internet.