Peak Usage
When selling bandwidth from an ISP like my company MetroBridge, or a data centre such as Peer1 or 1&1 a common measure for billing is called 95th percentile.
For those unfamiliar with 95th percentile billing here is as simple an explanation I can deliver. If you a using bandwidth for a month and your peak download OR upload rate is say 20Mbps your 95th of that might be 15Mbps for instance. The concept in itself involves dropping the top 5% of use to account for infrequent high bursts (in this example to 20Mbps).
Why is 95th an important billing method? It allows the supplier to account for peak demand and actually bill and make money off that peak level. If the supplier is relied upon to deliver to the end user at such a peak rate at ANY time, why shouldn't that peak rate be the billed amount since the supplier actually had to build infrastructure to accomodate for it? Of course there is oversell but in reality there is similar pattern of use between most end customers, requiring that expense asset expenditure to accomodate for peak levels of each and every end user.
Why aren't so many other things billed via this method? Cell phones, electricity, municipal water...etc.
