If you have any kind of internet connection, you are probably dealing with latency, whether you know it or not.  Latency has to do with how fast is internet, and with high speed internet, you will be less likely to encounter latency.  Therefore, it is important to find a good internet provider that will ensure that everything is up to speed (literally).  This is how it works: latency is the time it takes your data to get from point A to point B.  Latency occurs due to each of the stops your data has to make on the way to point B.

These stops, are called hops, and are the different routers and in some cases servers across the internet that handles and routes traffic. The more hops that are added into the route of your data, the higher your latency will be.

Of course, the farther away point B is, usually higher latency is experienced, simply because there is more distance and hops encountered. Also, each of these hops can also become busy so to speak, therefore the busier they get the more time it will take them to respond to your traffic requests, hence higher latency. Your bandwidth is the speed between you and your ISP, anything outside that; your ISP has no control over.

Most file transfer over the Internet uses TCP/IP.

The receiver constantly sends messages back to the sender (ACKS) letting it know all is will or if not which packets need to be resent. If the channel has high latency this reverse communication take too long causing transmitter to stop sending until ACKS are received. TCP also has a slow start mechanism.

The sender has no idea of end-to-end channel capability. A slow start is designed to prevent overwhelming intermediate slower links.

Latency might be an issue in some circumstances, while in others it does not create issues at all. Because latency is the delay between getting information from point A to B, it's much more of an issue in interactive applications then large transfers.  With large transfers, if your bandwidth is sufficient, reliable, and properly configured, you won't notice much of a latency issue with high latency connections.

As soon as the pipe is primed, the data is flowing at full speed. As long as the ACK packets are returned at a regular interval frequent enough that retransmissions don't occur, the flow will be steady and the only delay is really just during the initial startup of the transfer.  With interactive applications though, the initial delay can really get to you. While it is exaggerated, say you have one second latency and sending a packet takes 1 second. If you are sending a file that's ten packets long, your total connection time is 11 seconds.

If you are sending a single packet and waiting for a response back of a single packet, and you do this twice, your total connection time will be 8 seconds but yet you only sent 40% as much traffic. Web traffic is not typically a large transfer, but it's not highly interactive like a online game.

Typical page traffic is short bursts of requests followed by longer periods of inactivity while you look at the page.

There are a few tricks that can be done to help reduce this as an issue. There are proxy servers and pre-fetch utilities that will "preload" the page for you. During that time where you are looking at the page and your connection is setting idle, the prefetcher can download pages that the current one is linked to. When you request one, hopefully the page has been cached and can be displayed much quicker. If not, you are no worse off then having to wait for to load.