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it has nothing to do with legal or illegal. the margins are so small on tube site advertising profits, that they need to squeeze charity-like prices out of their hosts.
the only way the hosts benefits really is by the ability to raise their overall bandwidth usage/commitments and get lower costs that way for the rest of their client base.
if you're already at the floor of the lowest market pricing though, adding a loss will just equal a loss - UNLESS, you can some how "eat" the added bandwidth usage of this new client without increasing your overall usage too much because of your other clients traffic patterns, etc. but thats just a gamble as you don't know the specifics prior to them moving in and you already purchasing the hardware. anyways, explaining how and why hosts would take on a big bandwidth user at their cost or right above it is a lot of typing and saying words like "overselling" which 90% of the people on here think is a "bad" word; so not gonna get into all of that at 5:20AM.
to answer the question of the OP:
I would indeed be very worried that I would be involved in a lawsuit (due to recent rulings) over a tube site, like you said -- win OR lose -- the legal fee's would be very high and try getting your tube customer to pay for them ;)
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