Billing for Bandwidth

There are many ways to bill for bandwidth and describe usage in the market today. Most retail organizations like your cable or phone provider brag about maximum data rates and unlimited usage as though that is the speed you will receive and you will be able to download and stream video all day (search youtube for rants about usage limits by these companies..) Just remember if it sounds to good to be true it is, or it’s an Internet product.

If you are looking for lots of facts and information about bandwidth, check Wikipedia it is an excellent source for information about many of the terms used here.

Within and high quality ISP’s network, each customer has a SNMP managed port. Every SNMP managed port has a set of counters. Two of these counters are in and out octets (bytes of data).

When people refer to speeds they talk in megabits per second (mbps), when they talk in usage or quantity they use megaBytes (MBps). A byte (octet) is made up of 8 bits, this is simplified as when a byte is transmitted over a network there are typically overhead parity bits, and other methods to guarantee delivery that are way beyond the scope of this article, so for simplification we’ll stick with 8 bits in a byte of data.

There are many different types of circuits some are unbalanced like DSL where up and down are not the same, some are bursty like Ethernet and cable which are on demand protocols (shared ethernet with collision management), and some are reliable full duplex protocols like T1 and OCx optical standards (timing based no sharing). Each one is unique in it’s data carrying properties. For example ADSL and cable are typically shared networks with many users, carrier Ethernet is switched and full duplex to provide inexpensive high speed data transfer while providing a high quality of service, and T1/OCx are timing based to guarantee delivery of packets like voice.

Typical ISP circuits (non consumer grade)

T1 1.5mbps 20% overhead
Ethernet 10 mbps 30% overhead
Fast Ethernet 100 mbps
Gigabit Ethernet 1,000 mbps

Example usage at a sustained 1 megabit per second

bits per second 1000000
per second 125,000.00
per minute 7,500,000.00
per hour 450,000,000.00
per day 10,800,000,000.00
per 30 day month 324,000,000,000.00

1mbps/month=aprox 324 Gigabytes of data

With this information as a basis you can see there are many ways to handle and measure bandwidth, simple comparisons just don’t work, and sales jockeys talking latency, burstability, and quality of service rarely have any idea how it all works. In an effort to simplify comparison and reduce confusion for customers most quality ISP’s utilize one of four typical methods of billing. Circuit size, Usage billing, average throughput, and 95th percentile throughput.

Circuit billing is based on the size of the circuit delivered to a site, regardless of the use within the circuit, if a 1.5Mb T1 is delivered it costs the same up to full utilization regardless of if you are only using .256Mb of the circuit.

Usage billing is a direct method that uses the overall count of bytes in and out for a month. Each month the billing department downloads the counters from the switch ports and adds them up and that is your usage for the month. This method is very simple but at times has issues when counters are reset, or if they roll over. There are overage charges on each additional byte used over your plan.

Average throughput is just that and average of throughput. Typically ISP’s sample counters every 5 minutes, and average the entire usage for a month, some may charge more for daytime use, or lump it all together.

The 95th percentile method is the best of both worlds. This method uses the average throughput, however prior to the average calculation the samples are sorted and the top 5% of the samples are thrown out, what remains is the lowest 95% of the samples. An average is then run on the 95% and you have the 95th percentile. 95th percentile billing has advantages over fixed bandwidth billing. With the 95th percentile method you will not be penalized for occasional spikes of heavy usage. This method is the most widely used larger ISP’s. This allows a customer to purchase a larger circuit (say 100Mb Ethernet), burst up to high data rates, and only pay for a preset average.

Hopefully this information will aid you in your decision to pick an ISP.

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