Usage based paying is fine and in fact very very appropriate. It does not make sense to charge one person who uses 1000GB the same as someone who only uses 20 or 30 GB to check emails.
The real problem is that there needs to be more competition.
The real problem is that there needs to be more competition.
As you say, the 20 or 30 GB user would pay less for using a reasonable amount of email-checking, occasional youtubing bandwidth. But that reasonable number is orders of magnitude higher than what the same user would have used 10 years ago. Innovation in improving user experiences has driven bandwidth usage way up, even for the unassuming customer. Artificially limiting that cap results in stifling innovation.
Why is that limit artificial? Unlike water or power, data transfer is not a reservable resource. Bandwidth is a shared resource, but unused data transfer capacity has zero value.
And as others have indicated in this thread, the largest providers are not on the losing end of the current service bargain. But they are losing their hold on unrelated services like broadcasting. Switching to a usage-based model from a rate-limited model in an industry where startup costs are enormous and providers make a healthy profit is strictly an anti-competitive strategy.
Either data caps need to be way higher, or they need to go away. I find it bizarre that mobile operators can still get away with 0.5-1GB plans as the standard.
Similarly, that's why Netflix and Youtube struggle to load their 5Mbps video streams, while Bittorrent works fine. Bittorrent will simply not get any data from peers whose routes take the packets through the congested link, but use all the others. If there's only one route to a service, that's more likely to hit congestion.
Anyway, if ISPs want to charge for bits transferred, they'd better be upgrading their peering links and charging you based on how you're increasing their costs. Otherwise they're just charging you Because They Can, which is the real reason behind data caps. (What are you going to do, switch to their competitor?)
this is how you get people not getting medical treatment