AAHH the age old question.
Even once answered, its still hard to grasp. I really didn't understand it completely untill I started selling it.
95%ile for dumbys.
Every X minutes (usually 5, sometimes 1) the ISP's monitor makes a connection to either your switch port (snmp) or directly to your machine (managed servers)
They take a reading of current useage (its really much much more indept on what it reads, but for simplicity just think of it as a raw usage figure)
They take this number and store it in a database (usually a RRD, )
After storing every sample for the time period (usually monthly, some ISP's will also calculate daily and weekly for you) the calculations begin. How 95%ile is calculated is they take all of the samples, then they filter out the peaks (peak in OR peak out) they use one sample for in OR out, usually whichever is higher, some ISP's only do outbound. So you have one sample for every x minutes they poll. Then you take the top 5% or x number of samples and ignore them. The very next highest reading is what your billed on. Its not a real average, its the 95% read sample. The highest sample left is your billing, not a average of all samples.
Whats best for you?? Alot of ISP's don't let you choose what your billed on. 95%ile is probably the most popular. Next, is max thruput or capped connections. When you buy large lines like gigabit, or some ISP's like verio, your buying a capped thruput rating. Last and least popular is average. Its average in + out, and usually its more per meg than 95% because it is a true average usage.
If you run a smooth and consistant network, with few spikes, 95%ile is fine. It will alow for a couple heavy days without breaking your bank. BUT, viri or other net problems (password traders for adult sites is a common problem) can give you a heavy bill. The idea behind 95%il is that your billed on the size network you use, and alow you a bit of room to flex if you need to transfer a large file one day.
Running on a capped or max thruput line is just as good as 95%ile, but you dont have the luxury of the bursting now and then. Usually, its a few % cheaper per meg aswell. Industry 'standard' usually allows you a 25% burst on a capped line, but if your bursting heavily over your cap, you can expect your network proformance to degrade (i.e. game servers lag)
Good luck finding a ISp billing you on an average usage. If they are, you can spike to 80M one day, and average out over the month to only a couple megs. most ISP's wont let this happen, and the ones that do charge you for it heavily.
Well, thats ISp billing in a nutshell. If it sounds confusing, its cause it is
You can be billed on any of these ways, and even a combonation. Its all up to the network engineer and CEO's on how they manage there network.. Some companys are flexable, most are not.
