It works like any other network. Simultaneous load can be an issue, not the total amount of data you can use a month. Capping any plan for data is like limiting the distance you can travel on some road. It does not help unloading the traffic if the road doesn't have enough lanes. It's just a dumb marketing rip off scheme. I.e. I don't believe that data caps are used to prevent network congestion, it's a bogus excuse.
Exactly. This applies to any network, wired, wireless, whatever. You must design for peak load. "Data hogs" who are using data all day long don't contribute much to the peak traffic.
And the old "spectrum is finite" line is getting a little tired. Not only are all 4 carriers hoarding tons of spectrum, they can always "split the node" by adding more sites in areas where there is heavy traffic. Since they want to be cheap and not monetize the spectrum they hoard, nor do they want to expend capital on upgrading with new cell sites, they choose to implement caps.
And, being the good sheep most people are, they bend over and accept it. There is no reason networks should be congested, period. Yet ever time a carrier wants to whine or moan about FCC regulations or the "spectrum crisis", they just let it clog up and they get their way.
To be fair at least in t-mobile's case their ARPU is around $50 (per customer), which is literally 1/3 Verizon's. but yes these caps are pretty much artificial nonsense. Even satellite Internet providers providers unlimited data for a 6 or 8 hour period at night. The carriers could easily offer uncapped service during off-peak hours, much the same way they used to offer unlimited voice after 8 pm and on weekends.