Yes that is how it used to work for sms. My first cell I had to convince people to not text me because I didn't pay the extra ~$35 a month for texting, which I think got you 500 monthly texts. Friends that didn't know or when it was "an emergency" would send a few texts and cost me extra couple bucks a month.

For calls you used to get a pleasure with a set amount of minutes, such as 200, 500, and 1000 per month. Most carriers let you "roll over" unused minutes and typically anything after 9pm didn't count. Though I remember cingular offering 7pm as the unlimited time if you paid an extra fee (don't remember the cost).

Slowly larger plans, then unlimited became more normal. I can of remember it becoming more cost effective the same time more people were getting internet through cable or dsl, instead of dial up. So 2002-2005ish?