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One huge broadcast domain is starting to (thankfully) become more and more rare in hosting setups. It's insecure (as you see), and also you're billed for layer2 broadcast traffic that is not yours (all those ARP's and other traffic you see are being billed). I've seen setups where the broadcast domain is so large, that this adds 2-3mbit/sec. Usually it's in the few kilobits/sec range though.
Definitely strange to see this day in age. Most setups are either VLAN-per-customer or server, or layer3 to the customer edge.
The large layer2 broadcast domains are also habitually looked for, and exploited by spammers. They will buy a cheap dedicated server (or exploit a virtual account...), and run scripts which will bind IP's, send spam, then unbind them after a few minutes. It can be maddening to track these down (we have a customer who had a similar setup for far too long), not to mention the "real" people who own the IP's are losing traffic during that time frame.
Good luck!
-Phil
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