AFAICT, the reason why packets are getting dropped is because the ISP's equipment doesn't have the capacity to handle the traffic. i.e. internet is a series of

AFAICT, the reason why packets are getting dropped is because the ISP's equipment doesn't have the capacity to handle the traffic. i.e. internet is a series of pipes example. Level3 has a big fat pipe with 10Gbit/s of traffic going through to the peering point, where $ISP has a pipe that goes to their network rated at 1Gbit/s. Since the traffic can't fit into $ISP's pipe, the extra packets get dropped.