ISPs know that they are benchmarked solely on how fast people can download. Besides available bandwidth, download speed is influenced heavily by packet loss, which seriously hampers TCP/IP performance. Large queues can help prevent packet loss, and speed up downloads. So ISPs configure large queues.
These large queues however damage interactivity. A keystroke must first travel the upstream queue, which may be seconds (!) long and go to your remote host. It is then displayed, which leads to a packet coming back, which must then traverse the downstream queue, located at your ISP, before it appears on your screen.
This HOWTO teaches you how to mangle and process the queue in many ways, but sadly, not all queues are accessible to us. The queue over at the ISP is completely off-limits, whereas the upstream queue probably lives inside your cable modem or DSL device. You may or may not be able to configure it. Most probably not.
So, what next? As we can't control either of those queues, they must be eliminated, and moved to your Linux router. Luckily this is possible.
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Limit download speed
This is slightly trickier as we can't really influence how fast the internet ships us data. We can however drop packets that are coming in too fast, which causes TCP/IP to slow down to just the rate we want. Because we don't want to drop traffic unnecessarily, we configure a 'burst' size we allow at higher speed.