In the past year Netflix has exploded in use along with a lot of other video over the internet. Your complaint is not at all unusual today and the only fix is to wait for networks to be upgraded to handle the new demands.
The only thing that makes me wonder about your story of the direct connection is those "3 bars" which is usually when we connect with some wireless thing. Tell more.
Also, the cable modem system is well, how to make this easy to understand? It's a shared system where your neighbors can impact your network speed. If 5 neighbors pull up Netflix, your speed drops and you get lag.
Bob
Basically my friend lags for no reason at all constantly on Xbox Live . He never disconnects but he is always has a conection of 3 bar or less (MW3). This is his info about his set up and equipment:
"motorola gateway modem sbg6580
router- ASUS rt n56u
30 mbps down 5 mbps up
time warner road runner high speed internet
cable internet
coax cable box runs directly to the modem and i got rid of all the splitters on the internet line.
xbox connected directly by ethernet to router"
He also live in Hawaii but his internet was fine until 4 months ago where it randomally started lagging. Any advice on what is wrong and any steps that we can take to fix this problem would be very helpful

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