I've said this many times on multiple threads now, but I'm exactly in your position as well. I have gone through 2 ISPs ever since I started playing SK, BOTH of them worked great up until a certain update that made the game completely unplayable. For the first ISP I was on, SK worked great all the time up until the release of the Shadow Lairs in Oct. 2011. Then after a month or two of unbearable lag 100% of the time, I switched ISPs, and SK became playable again. But now, ever since the release of Ghosts in the Machine, the game has once again become unplayable, and I am completely out of options for internet service. My old ISP wouldn't work on SK, as I tried the game at a friends house who has the exact same ISP as my old one. Once the guild halls come out, with my luck I wouldn't be surprised if I couldn't even log on anymore. The only time I can play the game these days is when I'm on some super fast connection that I do not have access to at home.

I've done COUNTLESS registry editing, tweaking, fixing, optimizing etc. etc. etc. to improve the connection lag I have but nothing has ever made a difference. Correct ports have been forwarded, troubleshooting has been followed 100%, proxies have been used, and still all I can seem to get these days is stupid BS like this.

Now the ToS does state this:

3. Access. You must have access to the Internet in order to use Spiral
Knights. It is your responsibility to select, obtain and pay for any equipment
or services necessary for access.

If you ask me I think OOO should change it to this:

3. Access. You must have a high Upload/Download transfer rate and ultra low latency access to the internet in order to log onto and play Spiral Knights. It is your responsibility to live as close to our servers as possible and select, obtain and pay for the above said access to the internet.

OOO has done a really good job on this game, I have to admit. But I think they need to work on how the game's connection between the server and the client works. Not EVERYBODY has access to cable internet that can download games on Steam in a matter of minutes, so you would think you shouldn't have to have an extremely fast connection to play an online game like SK properly. I mean come on, I play many games online and the only time they lag is when someone else in the house decides to watch Netflix or if the internet traffic is busy which doesn't happen often. But SK? Oh no no no, your connection isn't top of the line so enjoy your attempt at navigating Haven's Town square.

TL;DR So in conclusion to my wall of text, I lag just as much as you do, I've done countless things to fix it, and I'm probably gonna quit the game as well until OOO decides to fix the lag for not-so-extremely-fast internet connections.