Besides maybe above the 98th percentile, data peering costs are very low that the physical infrastructure dominates the cost of service for residential users.

Besides maybe above the 98th percentile, data peering costs are very low that the physical infrastructure dominates the cost of service for residential users. Since residential connects are over subscribed anyway, it is trivial to make users throttle during peak demand based on their current/historical usage. If you use Cloudflare's costs and peering:transit ration from 2014 (which is almost certainly cheaper now); 1Mbps/month costs $8. [1] 1 Mbps/month is ~329GBytes. A 1TB data cap would be just ~3.1 Mbps/month costing $24.8. I'd estimate that a last mile ISP could probably get an effective rate of half or less since connecting to end users/consumers is an advantage. And in a lot of cases, the same ISP offering residential service is also selling transit to other networks so in a way the data is already paid for by the time it reaches your local ISP. [1] https://blog.cloudflare.com/the-relative-cost-of-bandwidth-around-the-world/ https://blog.cloudflare.com/the-relative-cost-of-bandwidth-a...