This method of billing is commonly used in peering arrangements between corporate networks; it is not often used by ISPs because such entities need committed information rates (CIRs) for planning purposes.
Some providers offer billing on the 90th percentile as an incentive to attract customers with irregular bandwidth patterns.
[1] The 95th percentile allows a customer to have a short (less than 36 hours, given a monthly billing period) burst in traffic without overage charges.
At the end of the month, the samples are sorted from highest to lowest, and the top 5% (which equal to approximately 36 hours of a 30-day billing cycle) of data is thrown away.
Other critics call for billing per byte of data transferred, which is considered most accurate and fair.