Traffic shaping with “netem delay” works ok, but limits upload bandwidth to 330KB/s. Why

Imagine trying to drive exactly 55 miles per hour if you had a one second delay between when you pressed on the accelerator and when the car went faster. You'd have a pretty hard time doing it.

And you would at least have the advantage that you know you need to drive 55 miles per hour. Now, imagine you don't know that. So what happens is when you go over 55 miles per hour, you get stopped and have to accelerate all over again, having no idea at what speed you're going to get stopped.

You sure as heck wouldn't average 55, would you?

Same thing here. The TCP stack has no idea it's limited to 2MBps and has to try to find that limit. And the latency means it cannot react quickly to the information that it has reached its limit. Since it can never actually go over 2Mbps, due to the hard limit, its average is going to be less than that.

You may be able to improve this with burst and/or minburst settings. Essentially what those do is let the connection go a bit over its limit if it's been below its limit. This way, it will go a bit over 2Mbps some of the time and that way it will have an average closer to 2Mbps.

You can use tc to shape bandwidth like so

This class will shape certain addresses to a certain speed. We also need to setup a filter so that any packets marked as such go through this rule

tc class add dev eth0 parent 1:1 classid 1:5 htb rate 256kbps ceil 256kbps prio 1
tc filter add dev eth0 parent 1:0 prio 1 handle 5 fw flowid 1:5

Once that class is setup, you need to setup iptables to mark the specific packets you want to shape.

Next, create the mangle table that's needed.

iptables -t mangle -N shaper-out
iptables -t mangle -N shaper-in

iptables -t mangle -I PREROUTING -i eth0 -j shaper-in
iptables -t mangle -I POSTROUTING -o eth0 -j shaper-out

Next setup the marks that we need to shape certain IP addresses. mark 5 is the one that is shaped to 256.
iptables -t mangle -A shaper-out -s 10.0.0.5 -j MARK --set-mark 5
iptables -t mangle -A shaper-in -d 10.0.0.5 -j MARK --set-mark 5

That should shape 10.0.0.5 to 256kbps.

Reference (my blog) - http://sirlagz.net/2013/01/27/how-to-turn-the-raspberry-pi-into-a-shaping-wifi-router/