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There are three options that make sense (though you don't necessarily want to offer all of them).

- X Mbps guaranteed, unmetered, do whatever you want (including servers). X here is not oversold: you need to have enough bandwidth for everyone to use the bandwidth you've sold them simultaneously.

- Port-speed connection that may burst to that speed, optionally with a guaranteed minimum Mbps that isn't oversold, X TB/month (pay more if you use more), do whatever you want (including servers). Here, the minimum Mbps is the non-oversold level, and the burst takes advantage of available bandwidth that others aren't using. You need the transfer limit here to prevent a small handful of users saturating their ports and crowding out all other users; if they want to do that, they can pay for it.

- Port-speed connection that may burst to that speed, optionally with a guaranteed minimum Mbps that isn't oversold, unmetered, best-effort based on the usage of other customers, ToS-limited to the types of activity that won't continuously saturate all available bandwidth (e.g. no continuous torrents beyond the minimum Mbps, no high-traffic servers). Here, you're not charging for additional bandwidth, but you're also telling people not to run anything that will saturate more than the amount you're guaranteeing them. Your remedy for users violating the ToS is to limit them to only the guaranteed bandwidth, effectively moving them to the first type of connection.

The first two options are standard with business-class Internet connections. The third option is what consumer Internet connections normally offer. You could offer a hybrid of the first and third options, where you can use X Mbps continuously for anything you want, but only burst to the full port speed intermittently.




On the second option you could replace the cap with per-customer fair queueing to end up with a work-conserving system. It's not clear what the resulting performance would be, though.


You don't have to avoid overselling. You just have to keep a safety margin over the promised minimum speed.




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