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There has always been something wrong with these usage policies. Its a technical problem, no? If you don't want me to make more than X requests, tell your webserver to stop answering them. If you can't do that, then what the hell are you doing operating a webserver on the internet?

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They did successfully block his requests. The issue is that he was charging for the service, and that was against their policy. That's why he was disciplined (though I find their response laughable and misguided).

Actually, it doesn't appear to have been against any policy, or it would have been cited as such.

This is basically what happens when bad administrators are made to look bad after they over-react to someone providing the community a service that the university chose not to. They find some flimsy excuse to punish the party they irrationally blame for their own actions.

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