There is a great deal of misunderstanding when it comes to the word “speed” in the telecom/networking world. I think its more misused by consumers who think they are getting a certain amount of “speed” but don’t realize what that actually means.
There are 3 main words that we need to define first:
Speed – The average consumer refers to “speed” as being the overall transmission rate of their internet connection. There is some truth to this but its not fully accurate. What we really need to do is define speed by using the next two words (bandwidth & throughput).
Bandwidth – In order for you to access the internet you need to be connected to a router. That connection between your router and the computer is most likely some type of Ethernet cable. That ethernet cable and the ports where you connect that cable to determines the “bandwidth” the circuit will be able to handle, example: 10Mbit, 100Mbits, 1000Mbits, etc….. So bandwidth is the possible link speed which is determined by the physical equipment used.
Throughput – When you access various websites, the request from the click of your mouse goes from your computer through hundreds of various devices across the path until the site which you were trying to get to is reached. Throughput is the actual speed you will get once all the latency/delay is calculated across the path from point A to point B.
So, “speed” is determined by the bandwidth of physical equipment and the added throughput variations in the path which will give us the true value for how much data one can send or receive.
Time for an illustration:
Say you have a three lane highway. The total amount of physical lanes you have are the three lanes, this is your bandwidth. Now suppose there was an accident and one of the lanes was blocked off. You still have three lanes on the highway but only two lanes that can be used for moving traffic, this is your throughput or “speed”.
In the world of networking/telecom, these words get used interchangeably but they are very different, however, both are used in determining how much “speed” one gets on their private or public connection.