I am having the same issue on my business connection 5Mbps as in another posting on this site. As soon as any computer starts a download the latency on the first hop past our DFG provided by our ISP (Bell) goes off the chart. This first hop is likely in our same building and is 1ms constantly, start a download, eg windows update, and it jumps to 200-1000ms.
I have spent hours on the phone with support all saying you have reach the max available bandwidth, it is normal for your latency to spike. But my reading tells me they are breaking something with TCP. I have run tests on a home Shaw connection and even on a Rogers LTE running downloads and reaching the max Mbps for my account but the latency does not go through the roof.
Am I right in my understanding that Bell is doing something to break TCP's built-in technologies to manage its rate based on the available bandwidth between the 2 end points?