This is normal behavior. If it wasn't happening on the 1mb connection then there was some form of throttling or QoS.
As to why this happens well it is simple to explain by using the water pipe metaphor. I don't like that one as it is not technically correct.
What happens is the data comes to you in blocks from your ISP the larger the block the longer the wait to receive more data as only one block can pass at a time.
Lets use S's as steam data and O's as game data.
when downloading you get something like this: SSSSSSSSSSOSSSSSSSSSSOSSSSSSSSSSOSSSSSSSSSO
what that crude diagram shows is when downloading at a high speed the space between the blocks of data are few and far between resulting in a higher ping because the game data has...