If they really want to align incentives it makes sense to switch to time-of-use based pricing like electricity providers have done. Since most of the cost is building infrastructure to support peak traffic, suggesting that consumers shift their usage pattern to be off-peak would be a notable cost benefit.

The obvious problem besides the added complexity for users is that I suspect there is relatively little "background" traffic usage. Almost all of it is people watching streaming video or interactive downloads. I doubt things like software updates that can be scheduled add up to much.

It would be interesting though. I wonder if it would lead to services promoting their download options more (example auto-download likely videos every morning).

That would make sense if ISPs' costs veried per GB like a power suppliers costs vary per kWh. But they don't really. 99% of the cost of them is running the initial fibre/copper and then maintaining it. Until you reach the limit of the infrastructure, the cost per extra GB is basucally nothing.

They should also charge reasonable wholesale rates in that case if you remove the monopolization of the last mile. In other countries this is actually how it works already, the underlying cabling is municipal, you just pick an ISP to transit over it.

Comcast charges $0.20/GB for coaxial. Verizon charges $10/GB for LTE. My actual cost for hosting side projects is below $0.50 per 1 TB. It is unreasonable if they are going to fuck with your traffic, tamper with your HTTP payloads and inject scripts into them, deprioritize certain data and still charge multiple orders of magnitude more per GB.

It seems like you're comparing the cost of serving data out of a purpose built location to the cost of transporting it to and from an individual person. Not saying Comcast or Verizon are offering good or bad per GB prices just that it seems you're comparing the cost of your apples (unless your side project is a LOT larger than I'm assuming) and then saying the oranges are mispriced as a result.

I am, but this was with the implication that the last mile fiber was already built out, city/municipality-owned and you are already paying an access fee to use the cabling, therefore you are effectively just transporting packets to/from your own core anyway.

The variable cost of bandwidth is orders of magnitude lower than electricity. I suspect this subsidy is much lower than you might think.

Quality of service is also not correlated with usage. packet loss, queuing and dropped connections result in higher usage and are directly the fault of the ISP. they can oversell a region and under provision and then charge excessive bandwidth fees because of it.

The electric company charges per kWh because it costs money to generate that kWh of electricity.