Server Bandwidth Limitations

My company is about to launch an online teaching product allowing users to use a webcam to record themselves giving a presentation.  That presentation can then be submitted to a supervisor to review and comment on.  While making their recordings, users can record multiple attempts and review each immediately after stopping the recording.  All of this is being done with a browser based Flash application connecting to an instance of FMS 3.5.

All of this is working well.  However, we recently found out that due to some of our other products, we are getting hammered with fees based on the amount of bandwidth we are using in our data center.  We have made some alterations to curtail these problems, but we are concerned that this new product is going to push us over the edge again.  Our original plan was to keep the video stream right around 115 kbps, a relatively low data rate.  But when thinking about the expected concurrent users, the bandwidth starts to stack up and really spike.

So we are now looking for ways to limit the bandwidth that this new product will use.  One idea was to figure out how to record the video locally when users where recording their test presentations.  I thought that was now possible, but apparently that is not yet the case with the Flash Player.

Another idea was to limit the bandwidth that is allocated to each user that connects to our FMS.  We are hoping to address the spiking issue with this limitation.  I am, however, concerned about what will happen to a video stream that is getting squeezed on the server site.  I know when users have limited bandwidth, video files that are published to the FMS are compromised (poor quality).  But what happens when the bandwidth is limited on the server side?  Do the same things happen to the published video file?  Or can the server somehow queue up the data coming in and deal with it in full when it finally gets to it.  My guess is that this is not the case, but was curious what others though.

If you have any other ideas on how to work around our bandwidth issues, I'd be more than happy to hear your thoughts.

Thanks!