> If you're sending a packet to London, rather than next door; it touches more routers, and takes up more fiber capacity, (...)
There's the bug in your logic: A packet to London may touch less routers than one next door due various reasons that disallow routers near you to handle the traffic (maybe the "direct line" between you and your neighbor is damaged. Then it has to go to London and back - and this is only the most simple example). In general, you cannot say which routers are touched by a packet before you've send it.
> There's the bug in your logic: A packet to London may touch less routers
Regardless of the number of routes, the ISP knows before relaying your packet that certain destinations require the use of paid traffic while other can be accessed with peered traffic. I agree with the grand-parent: it seems strange that ISP are not charging more for access to IPs that are outside their peering agreements. I am not suggesting it; I just find it strange that they are not trying to push it on us like the mobile operators are trying to do giving you free access to Facebook [1] and their own music stores while charging for access to other sites.
There's the bug in your logic: A packet to London may touch less routers than one next door due various reasons that disallow routers near you to handle the traffic (maybe the "direct line" between you and your neighbor is damaged. Then it has to go to London and back - and this is only the most simple example). In general, you cannot say which routers are touched by a packet before you've send it.