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Speed and bandwidth are interdependent. The combination of latency and bandwidth gives users the perception of how quickly a webpage loads or a file is transferred. It doesn't help that broadband providers keep saying "get high speed access" when they probably should be saying "get high capacity access". Notice the term "Broadband" - it refers to how wide the pipe is, not how fast.
Latency is delay.
For our purposes, it is the amount of time it takes a packet to travel from source to destination. Together, latency and bandwidth define the speed and capacity of a network.
Latency is normally expressed in milliseconds. One of the most common methods to measure latency is the utility ping. A small packet of data, typically 32 bytes, is sent to a host and the RTT (round-trip time, time it takes for the packet to leave the source host, travel to the destination host and return back to the source host) is measured.
The following are typical latencies as reported by others of popular circuits type to the first hop. Please remember however that latency on the Internet is also affected by routing that an ISP may perform (ie, if your data packet has to travel further, latencies increase).
Bandwidth is normally expressed in bits per second. It's the amount of data that can be transferred during a second.
Solving bandwidth is easier than solving latency. To solve bandwidth, more pipes are added. For example, in early analog modems it was possible to increase bandwidth by bonding two or more modems. In fact, ISDN achieves 128K of bandwidth by bonding two 64K channels using a datalink protocol called multilink-ppp.
Bandwidth and latency are connected. If the bandwidth is saturated then congestion occurs and latency is increased. However, if the bandwidth of a circuit is not at peak, the latency will not decrease. Bandwidth can always be increased but latency cannot be decreased. Latency is the function of the electrical characteristics of the circuit.
>> Bandwidth is the amount of data that can be transferred during a second. This is where the confusion comes in. Is it maximum amount of data that can be transfered per second ? Or Maximum amount of data that can be transfered between two idle (high speed) links? When the unit is bits per second, it already has speed in it. There should me something more to qualify it similar to my question above.
"Latency is the function of the electrical characteristics of the circuit"? So that's what ping measures, some aspect of the electrical characteristics of the circuit? No. While it's true that the medium and signaling technology (i.e. layers one and two of the OSI model) set the overall parameters for latency, the processing capability of routers and switches, packet shapers, firewalls, intrusion detection systems, network card drivers, and protocol stacks are also sources of latency that CAN be optimized.
Also read About DSL for lots more information