That sounds like a fixed cost to build the network, not the cost of running the network. I agree, building a higher capacity network is more expensive, but how does the cost of running a network change with utilization? If a network is underutilized does it somehow cost less to operate?

More capacity is more things to break and fix.

If it's underutilized, you can save money by delaying replacement.

Let's keep things simple and say in one interconnect you'e got 4x 10G ports. If your utilization peaks at 5 Gbps, you way overbuilt that connection, but if one port breaks, you don't need to fix it until another port breaks; you can wait until three out of four ports are broken if you feel lucky. That delays hardware replacement and eliminates service trips and probably reduces technician time. If that connection peaks at 35 Gbps, you should fix any issues ASAP. (And start planning for capacity increases).

Of course, if the connection is to another network, they may bill for usage too; although I'm pretty sure US dominant ISPs are not paying for usage on most of their connections.

When a link reaches 50% it's time to upgrade. Heavier utilization and faster traffic growth means shorter intervals between capital expenditures. $10 per 50GB is a monopoly windfall but it does theoretically hold down demand. People don't BitTorrent 24/7 or leave video chat running while they sleep if there's punitive overage fees.

Well just think about the backhaul or middle mile costs - the more the network is utilized, the higher the middle mile cost commitments will be. There’s a direct relationship there, assuming your oversubscription targets stay basically constant.