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> 1) Can a cable ISP even route traffic between residential customers without schlepping out to a POP?

Guess it depends on the ISPs implementation but in my experience, yes, some ISPs let you route traffic between residential customers, granted you've setup your router correctly.

> 2) Where does the upload bandwidth limitation live?

In my experience, the limitation lived further away than the residential building, as we hit our own equipment's limits before we hit any other limits.




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