Bandwidth billing sounds straightforward until you get into the details. Most businesses are familiar with two models: a fixed speed with a data allowance, or a fixed speed with unlimited data. But for businesses running dedicated fibre or enterprise-grade connections, there's a third model that's often a better fit — 95th percentile billing.
If you've seen it mentioned on a quote and weren't sure what it meant, this article breaks it down clearly.
The problem with fixed data limits at higher speeds
When connection speeds were modest — 10 Mbps or 20 Mbps — capping data made reasonable sense. You could estimate monthly usage with some confidence, and overages were manageable.
As connection speeds have scaled — 100 Mbps, 500 Mbps, 1 Gbps — the data volumes involved become enormous. A 100 Mbps connection running at capacity would consume roughly 32 terabytes in a month. Even at modest average utilisation of 20%, that's over 6 TB. Applying a traditional data cap to a connection like that either prices it out of reach or forces the carrier to throttle it the moment usage picks up — which defeats the purpose of a fast connection entirely.
Unlimited data at high speeds is one answer, but for dedicated business-grade connections, it creates a different problem: businesses that use their connection consistently all month are subsidising those that burst it hard constantly. Neither party gets a fair price.
How 95th percentile billing works
95th percentile billing measures how you actually use your connection over the course of a month, rather than counting every byte transferred.
Here's how it works in practice: your router or the carrier's equipment records the average bandwidth being used at one-minute intervals throughout the month. At the end of the billing period, those measurements are sorted from highest to lowest. The top 5% — representing roughly 36 hours of peak usage — are discarded. The next highest measurement becomes the 95th percentile figure, and that's the number your bill is based on.
The result is that your connection can burst freely to its port limit whenever you need it, without penalty. You're only charged based on what you consistently use. A business that regularly runs at 200 Mbps but occasionally spikes to 800 Mbps pays for the 200 Mbps pattern — not the 800 Mbps spikes.
Who benefits most from this model
95th percentile billing works particularly well for businesses whose traffic is genuinely variable — where average usage is moderate but there are legitimate reasons to burst higher at times. Common examples include:
- Businesses that run large nightly or weekly backup jobs that consume significant bandwidth briefly, then return to normal usage
- Organisations with seasonal traffic patterns — periods of intense activity followed by quieter periods
- Companies running multiple offices or sites through a central connection, where traffic tends to cluster during business hours
- Businesses where some staff are on-site intermittently and bandwidth usage varies considerably day to day
It's less of an advantage for businesses that run at consistently high utilisation throughout the month. If you're regularly pushing 80–90% of your port capacity, the 95th percentile figure will be close to your peak anyway, and a fixed-speed unlimited model may work out simpler and comparable in cost.
How it compares to unlimited flat-rate billing
The key difference is that 95th percentile pricing scales with actual usage rather than provisioned capacity. A business that pays for a 1 Gbps port but consistently uses 150 Mbps will pay significantly less than a business hammering the same port at 800 Mbps all day. This is fairer to both parties — the carrier isn't absorbing chronic overuse, and the business isn't paying for headroom it never touches.
For businesses that genuinely use the full port capacity consistently, flat-rate unlimited may come out ahead. The right model depends on your usage profile, which is something a carrier with access to your traffic data can help you evaluate.
What this means for enterprise and fibre connections
95th percentile billing is most commonly associated with dedicated fibre and enterprise-grade connections — the type of circuits that carry significant, business-critical traffic rather than shared NBN links. If your business is considering dedicated fibre internet or an NBN Enterprise Ethernet connection, it's worth asking how the billing model works and whether 95th percentile pricing is available.
The short version: if your business has predictable core usage with occasional legitimate spikes, 95th percentile billing will almost certainly work in your favour. If you're not sure what your usage pattern looks like, talk to our team — we can work through the numbers with you before you commit to anything.