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Should LAN traffic affect Internet speeds?

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I have 2 computers plugged into my 2wire 3600HGV's ethernet ports. I have the Max Turbo (24 Mbps) plan and I always get the normal 125% of rated speed (~29 Mbps). However, when I'm transferring files from one computer to the other, my Internet speeds drop to a measly 1.6 Mbps. Is this normal?

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