You're both right and wrong. You're right because serious internet lag issues stem from problems along the line, or simple physical distance. However they're also right to advertise with bandwidth, because bandwidth does impact lag. On a 10MBit line, you will need 10 ms to upload 12.5kbyte, and another 10 ms to download the same as the response from the server, making turnaround time for such a package 20 ms. That's more than one whole frame for an application running at 60 fps. With a 1000 MBit line, the turnaround time for the same will be 0.2ms, basically nothing. On the other hand: For both cases you need to add the distance as a flat factor, so whether you notice it or not depends on whether you're communicating to a server close by (20-50ms) or one a continent away (150-300ms).