http://www.sitespecific.com/about/95th_percent.asp has a good explination
Computing the 95th percentile from the accumulated 5-minute data transfer samples provides an effective means of evaluating the regular, sustained utilization of your connection. The 95th percentile calculation is a widely used mathematical algorithm--most large service providers (UUNet, Sprint, Cable & Wireless, etc.) use this method to calculate bills for larger circuits (e.g. Ethernet, T3).
To compute the 95th percentile value on a data set, the following algorithm is used: sort the data set by value from higest to lowest, discard the highest 5% of the sorted samples, and the next highest sample becomes the 95th percentile value for the data set. For example, suppose that a month is 1 hour, 40 minutes in length. Over the course of this short month, we gathered the following data sets for the inbound and outbound traffic (all numbers in Mb/s):
Its basically just billing on what is used 95% of the time. So if you had a commit of 2Mb/s for example and you stayed at a constant 2Mb or below all month you would be fine. Small spikes to even 10M/s wouldnt cause an overage as long as they didnt stay for more than a few hours over the month
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