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ISP speed is based in part on latency. In fact, it has an especially huge impact on perceived ISP speed. Latency is the minimum time it takes to perform any network operation, no matter how small. It is partly determined by the distance between one's computer and the ISP server (there are speed of light restrictions, after all). The actual hardware involved at each side of the connection though has a bigger impact. Most consumer hardware tends to have poor latency, and to the person browsing the Web pretty much all the perceived slowness comes from latency.