How do ISPs perform broadband shaping and what do they gain from the process?

Answer 1

ISP’s have equipment that can monitor the activity on your modem; not necessarily what you do but more so how often you do something. Most of what they see is purely bandwidth usage - upload and download activity. From that activity they can figure what actions you, as a user, are performing and take a measure of the average for all of their customers.

File sharing and running servers use large amounts of bandwidth. Internet browsing and e-mail checking use relatively little bandwidth. After they crunch the numbers they set a point at which

A) The novice user will never be aware of any limitation
B) The casual user will see relatively no difference
C) The power-user will be only slightly hindered

Most people don’t run servers from their Internet accounts unless they sign up for a commercial account. Those that do massive amounts of file sharing are in the minority when compared to the average. This is the group that will see the largest change and be most likely to complain. The small numbers of this group do not outweigh the vast majority of subscribers and therefore the ISP will likely just deal with the “situations” as they arise.

If an ISP can set a maximum limit to the usage, they can control the amount of equipment needed to support their customer base. The shaping allows them to better predict how much bandwidth could be used and therefore they can budget what they need without spending excessive amounts of money on equipment (and maintenance for the equipment) they might not need.