My last apartment had <1mbps with AT&T. I was working remotely for a company that required VPN+VNC into a linux server on their intranet to get anything done. Any time my roommates tried to watch something on hulu/netflix (frequently), our router had to be rebooted.
Your router was shit, then, and probably bad enough that you weren't able to measure the true connection speed. Did you let the ISP provide the router? That's always a mistake.
It was an exceptionally shitty router, yeah. One of my roommates wanted to be in charge of the internet connection; she went with the lowest end AT&T plan, and she had the router that they had given her in her last apartment. On top of that, the cable going into the router was practically falling apart; I didn't actually know any of this until shortly before I moved out, at which point there wasn't a lot of motivation to do anything about it.
Upon moving out, I got a 18 Mbps cable subscription & a Motorola Surfboard Extreme. Now the only shitty piece of networking equipment in my setup is a Belkin wifi router that I haven't been bothered to upgrade.