Many webmasters pick their hosts based on the price alone. And even if that is not the sole decision-making point, bandwidth rates are almost always a consideration. It is often the experience of a webmaster to get into a contract or open an account with a provider that appears to be the lowest priced only to find another provider at half the cost 6 months later.

So, what are webmasters supposed to do? First, it is important to explain what effects hosting prices. With most hosting providers, they are usually buying their bandwidth from a high-end fiber carrier. These carriers provide large amounts of bandwidth at low prices. The hosting provider purchases the bandwidth and then attaches their servers to that bandwidth. When a webmaster opens an account with a hosting provider, they are often not actually buying bandwidth from that provider. They are buying a hosting service that uses another carrier's bandwidth. The hosting provider will mark up the cost they are paying to the carrier, add some costs for labor and equipment, and then you have your hosting rate.

Since the labor and equipment costs have not changed much over the last few years, it is the carrier's bandwidth that affects what you pay for hosting. This is exactly the reason that hosting rates have dropped - bandwidth rates have dropped.

The main carriers will always have slightly higher than average bandwidth costs. These carriers have been around for a long time and charge more because of how well laid their network is. These include Sprint, MCI, UUnet, and AT&T. Anytime you can find a hosting provider that uses these, you will not get the lowest rates available, though you will be getting good service.

Several years ago, a new carrier exploded onto the scene with rates in most cases half as much as other carriers. This company, Level3, caused a chain reaction that first allowed per-gig rates to reach $2/gig. However, they were not as solid as the major carriers and experienced some major growing pains. Now, though, I would trust them with my most profitable websites.

Level3's rates have not lowered much, but other providers have since matched their rates, and now every hosting company is at least able to charge $2/gig.

Not too long ago, another pioneer, Cogent, started selling bandwidth at incredibly low rates - and hosting providers began to introduce the 50 cents per gig rates. And so on.

So, when these new providers show up, does that mean you should drop your current provider and run to the new one? Well, that is a matter of preference on your part. It is important to keep in mind that when new carriers open up, it is often brand new hosting providers that take advantage of their rates and plan to make their business by offering the lowest rates in the market. So, in many cases, you are going to end up trusting your website to the new guys on the block, instead of an experienced provider.

Although you may end up waiting up to 2 years, your existing provider will often be able to offer you the new rates soon. Keep in touch with them so you don't miss the opportunity. I would especially recommend this if you are happy with your current provider and they treat you well. In hosting, you have to be with someone that can take care of your server; the hosting rate won't matter if the server is mismanaged.

If you are not happy with your current provider, by all means, jump ship and go with one of the new low rate providers. Try to ask around first though and find one that someone else has used. If your current provider seems reluctant to ever offer you the lower rates, and they have been out for quite a while, you may want to consider a new provider as well.

Play it smart. If you are determined to always have the lowest rates on the market, it means you are going to be jumping from provider to provider every 3 months, which in the end will likely cost you more because of hassle. Change your provider when it is economically smart for you to do so.