said by k1ll3rdr4g0n:
ISP's do NOT pay per amount of data, they pay for the speed of data (assuming they don't have a backbone of some kind)
if an isp has a backbone -- transit is free, but the peering is not. the transit path simply allows them to carry data where cheap peering is available (or to provide "in house transit" to different nap's in the country).
at the end of the day -- if the destination resides out of the control of the isp's network, then traffic will have to be handed off to another carrier -- sometimes at a cost. depending on the size of the carrier, traffic agreements, load sharing, etc, the peering may be "free" since the two peers will come to an agreement that traffic will be roughly equal and differences split at the end of the quarter/half/year, etc (generally true for tier-1 access). however, if the isp is a residential access network that is not an old lec (i.e. your mso's) and they don't have a significant userbase from which to draw destination traffic from -- they will probably end up paying for throughput in one way or another (something like 95th percentile or so).
"...if I in my north room dance naked, grotesquely before my mirror waving my shirt round my head and singing softly to myself..."