Data transfer in a web hosting package
Data transfer is the amount of data transferred to and from your web hosting account. This page describes in detail different data transfer policies, and explains their strengths and weaknesses.
Unmetered, high and moderate data transfer
Data transfer (or bandwidth) is an important aspect of a web hosting package. If your data can't be transferred, nobody can visit your web site. There are three common data transfer policies in use by web hosting providers.
Unmetered data transfer
Unmetered (or unlimited) data transfer means that you will not be charged extra no matter how much data your account is transferring. Most web hosting accounts does not use anywhere near their data transfer limits, so web hosting companies normally have an excess of data transfer they can give to those who need it.
But your data transfer is really not unlimited in the right meaning of the word. Bandwidth is expensive and a web hosting company has to make money. There is a limit that is not well specified, and if you pass this limit, proper actions will be taken. This can mean that you have to change parts of your website or upgrade to a more expensive account.
In some cases you web host can just say 'Hey man, it has been nice to have you as a customer, but you have grown out of our services now. You should find a web host that serves more demanding customers like you.' Or the worst case scenario, your web host shuts down your account without prior notice.
If you are considering a web host with "unlimited data transfer", it is important to look at their terms of service. There should be an entry explaining their unlimited data transfer policy, and this is really the key to find out if this web host will enforce their 'unlimited' policy in a fair way to their customers (without getting any first or second hand experience with this particular web host). If in doubt, ask the web host to explain their 'unlimited' policy before signing up.
High data transfer allowance + extra charges
As with unlimited data transfer, the web hosting company would lose money if every customer used their data transfer allowance. And their servers would be overloaded, resulting in slow downloading and in general poor performance.
But luckily, this seldom happens. Again, the reason is that most customers does not use anywhere near their allowed data transfer. Thus, there is an excess of data transfer available.
This policy is very good for those who need high data transfer, but does not have web sites that are very demanding in other areas. In some cases, you can get $50 in data transfer in a $10/month hosting package.
Moderate data transfer allowance + extra charges
Web hosting companies who are playing safe will use this policy. Moderate data transfer means that a hosting account's allowed data transfer is equal to or not high above the average data transfer the server will tolerate without compromising performance.
This policy almost guarantees that high traffic will not affect how the server performs as long as the web hosting company has the right hardware. If you require a stabile server but does not need very much data transfer, this policy is a good choice.
If your web site gets popular, you may have to pay for extra data transfer. This can be expensive, depending on the prices. Around $5/gb can be considered a fair price for data transfer. Some web hosts charge way above $10/gb. If you have to pay that much, upgrade to an account that allows more data transfer or find a new web host.