There are many good references that explain how some applications such as VoIP are sensitive to network latency, but there is also some confusion as to what latency actually is as well as perhaps some misinformation about the causes. In the article below, we’ll separate the facts from the myths and also provide some practical analogies to help paint a clear picture of latency and what may be behind it.
Fact or Myth?
Network latency is caused by too many switches and routers in your network.
This is mostly a myth.
Yes, an underpowered router can introduce latency, but most local network switches add minimal latency — a few milliseconds at most. Anything under about 10 milliseconds is, for practical purposes, not humanly detectable. A router or switch (even a low-end one) may add about 1 millisecond of latency. To get to 10 milliseconds you would need eight or more hops, and even then you wouldn’t be near anything noticeable.
The faster your link (Internet) speed, the less latency you have.
This is a myth.
The speed of your network is measured by how fast IP packets arrive. Latency is the measure of how long they took to get there. So, it’s basically speed vs. time. An example of latency is when NASA sends commands to a Mars orbiter. The information travels at the speed of light, but it takes several minutes or longer for commands sent from earth to get to the orbiter. This is an example of data moving at high speed with extreme latency.
VoIP is very sensitive to network latency.
This is a fact.
Can you imagine talking in real time to somebody on the moon? Your voice would take about eight seconds to get there. For VoIP networks, it is generally accepted that anything over about 150 milliseconds of latency can be a problem. When latency gets higher than 150 milliseconds, issues will emerge — especially for fast talkers and rapid conversations.
Xbox games are sensitive to latency.
This is another fact.
For example, in may collaborative combat games, participants are required to battle players from other locations. Low latency on your network is everything when it comes to beating the opponent to the draw. If you and your opponent shoot your weapons at the exact same time, but your shot takes 200 milliseconds to register at the host server and your opponent’s shot gets there in 100 milliseconds, you die.
Does a bandwidth shaping device such as NetEqualizer increase latency on a network ?
This is true, but only for the “bad” traffic that’s slowing the rest of your network down anyway.
Ever hear of the firefighting technique where you light a back fire to slow the fire down? This is similar to the NetEqualizer approach. NetEqualizer deliberately adds latency to certain bandwidth intensive applications, such as large downloads and p2p traffic, so that chat, email, VoIP, and gaming get the bandwidth they need. The “back fire” (latency) is used to choke off the unwanted, or non-time sensitive, applications. (For more information on how the NetEqualizer works, click here.)
Video is sensitive to latency.
This is a myth.
Video is sensitive to the speed of the connection but not the latency. Let’s go back to our man on the moon example where data takes eight seconds to travel from the earth to the moon. Latency creates a problem with two-way voice communication because in normal conversion, an eight second delay in hearing what was said makes it difficult to carry a conversion. What generally happens with voice and long latency is that both parties start talking at the same time and then eight seconds later you experience two people talking over each other. You see this happening a lot with on television with interviews done via satellite. However most video is one way. For example, when watching a Netflix movie, you’re not communicating video back to Netflix. In fact, almost all video transmissions are on delay and nobody notices since it is usually a one way transmission.
NetEqualizer News Blog 
Are Hotels Jamming 3G Access?
November 28, 2010 — netequalizerBy Art Reisman
About 10 years ago, hotel operators were able to squeeze a nice chunk of change out of guests by charging high toll rates for phone service. However, most of that revenue went by the wayside in the early 2000s when every man, woman, and child on earth started carrying a cell phone. While this loss of revenue was in some cases offset by fees for Internet usage, thanks to 3G access cards most business travelers don’t even bother with hotel Internet service anymore — especially if they have to pay for it.
Yet, these access cards, and even your cell phone, aren’t always reliable in certain hotel settings, such as in interior conference rooms. But, are these simply examples of the random “dead spots” we encounter within the wireless world, or is there more to it? From off-the-record conversations with IT managers, we have learned that many of these rooms are designed with materials that deliberately block 3G signals — or at best make no attempt to allow the signals in. This is especially troubling in hotels that are still hanging on to the pay-for-Internet revenue stream, which will exist as long as customers (or their companies) will support it.
However, reliable complimentary Internet access is quickly becoming an increasingly common selling point for many hotels and is already a difference maker for some chains. We expect this will soon become a selling point even for the large conference centers that are currently implementing the pay-for-access plan.
While meeting the needs and expectations of every hotel guest can be challenging, the ability to provide reliable and affordable Internet service should be a relatively painless way for hotels and conference centers to keep customers happy. Reliable Internet service can be a differentiating factor and an incentive, or deterrent, for future business.
The challenge is finding a balance between the customer-satisfaction benefits of providing such a service and your bottom line. When it comes to Internet service, many hotels and conference centers are achieving this balance with the help of the NetEqualizer system. In the end, the NetEqualizer is allowing hotels and conference centers to provide better and more affordable service while keeping their own costs down. While the number of 3G and 4G users will certainly continue to grow, the option of good old wireless broadband is hard to overlook. And if it’s available to guests at a minimal fee or no extra charge, hotels and conference centers will not longer have to worry about keeping competing means of Internet access out.
Note: I could not find any specific references to hotels’ shrinking phone toll rate revenue, but as anecdotal evidence, most of the articles complaining about high phone toll charges were at least 7 years old, meaning not much new has been written on the subject in the last few years.
Update 2015
It seems that my suspicions have been confirmed officially. You can read the entire article here Marriott fined for jamming wifi
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