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Bandwidth shaping is the process of allocating parts of network connections as well as establishing bandwidth usage amounts that correspond to activity types. As it relates ISPs, the term refers to the limitations they set to manage the amount of bandwidth individual consumers use so that no one user can obtain a disproportionate amount of control over the Internet gateway.
Bandwidth shaping is also referred to as bandwidth allocation, bandwidth allocation tool, bandwidth management and traffic shaping.
Bandwidth shaping has become necessary as Internet users' bandwidth consumption has increased with new online content types, which can pose a threat if content distribution uses up too much bandwidth. Types of content distribution that tend to use the most bandwidth include peer-to-peer file sharing, anonymous file sharing, file-sharing websites, community websites and video streaming such as YouTube. As these types of distribution rise, ISPs face the challenge to offer more bandwidth to their customers. Smaller ISPs must be particularly mindful of the amount of bandwidth their customers use because it is costly to manage bandwidth.
ISPs must meet the ever-increasing need for content distribution and bandwidth delivery like speed, size and optimization. In order to do so, they must carefully monitor how much bandwidth goes to whom and adjust it accordingly, or grow if need be. Many open source code implementations are available to automatically manage bandwidth by limiting it to certain megabits per second. Mobile phone providers do a fairly good job of bandwidth shaping by centering it around peak traffic times.