You would still need the ISP's and bulk data carriers
Unfortunately, yes, this network will always be heavily dependent on the internet.
In your whitepaper, you wrote: "capable of operating without traditional internet providers". If that's not the case, you should start by changing the name

I've seen
Silicon Valley, I like the idea of a decentralized internet, but like most things that claim to be decentralized, it's not decentralized. It sounds like you're adding a blockchain to something that doesn't need a blockchain.
The key difference between the existing Web3 and my proposed solution is that my version can, in theory, operate without the internet at all, even internationally, unlike other projects that operate exclusively over the internet. The problem is that it's unlikely that international cables for KeyNet will be built in the initial stages of the project's development, and it's likely they won't allow it. Therefore, there will certainly be a dependence on existing networks like the internet, but the goal of the project is to reduce this dependence.
Blockchain is necessary in this case to confirm ownership of domains/addresses, as well as to enable DNS functionality, where each backbone will have up-to-date and, most importantly, reliable information, which will be distributed decentrally, not by a single central authority.