A common practice in the telco and ISP industries. A process of estimating the average bandwidth use of a large number of customers in order to save money on bandwidth and telco costs. An example of this is where you take 200 dialup modem customers and have them share a single T-1 to the Internet. 200 modem customers could take up over 10 megabits of bandwidth altogether, but in reality they don't usually all use the system at the same time. Therefore you can get away with this over-subscription ratio of more than 7 to 1.
The advantage is that most people won't ever notice any degradation in speeds most of the time.
The disadvantage is that heavy users WILL notice.