When Twitch.tv first started I could watch pretty much any stream in high quality without any issues especially as the more popular it got the streamers were starting to stream in higher quality.
For maybe the past year or two its been very inconsistent to the point where I can general only watch in medium quality without having freezing as the buffer never gets to a point where it can deal with any stoppages in data. As a side effect I have had to watch a lot of the streams after they have been recorded and even then its not really a smooth playback considering you can only play it back in the higher quality.
I decided to look further into it so I setup a program to see how much data is being transmitted/received and noticed I was getting anywhere between 0-350KB/s. I changed a few settings like MTU etc to see if that had any effect without success. Then I thought I'd test a VPN and decided to go with VPNArea and something strange started happen.
I first connected the VPN through an Australian based server and started a playback of a previously recorded stream and noticed my received bandwidth started to cap out at my maximum download which is around 2.2MB/s even though what I was watching was still pausing as the data incoming was very erratic.
I then connected the VPN to a US based server and I was able to playback the recording without any problems to the point that it would buffer at least 20-30 minutes ahead. I then started watching some streams in high quality without any issues, the data incoming was very consistent and looked like peaks the same distance between each other which I would presume is what it should look like when you are watching a video stream.
I can only presume what is happening is the traffic to/from Australia for Twitch.tv to the West Coast of the U.S. is being thrown down a congested path which is causing the performance issues. The ISP's in Australia are saying there is no limiting/restrictions at their end.
The only issue is, if I watch a stream I can pretty much only watch it. If I do anything else it causes it to lag, for example if I start steam even though its not downloading anything the performance drops.