Are you playing on a wired or wireless connection? Someone on a DOA forum made a thread about the lag only to later in the thread decide to mention he was using wireless. Blew my mind.
I've mentioned in the thread before that I've had smooth matches with as far as the NA east coast from Europe, and that's the only one I'm certain of the exact location. I had the game 2 days before European release, so it was mostly NA players I was getting matches with.
I'm playing wired. I'm playing vs. people I have great connections with otherwise in other fighters.
The game's netcode makes the game online play similar to DoA5, but, to me, it's entirely different offline. Punishing moves with tight frames, countering, slow escaping, movement are all more difficult online.
It's playable. It is not horrible, but it's far from good.
I say this seriously, in earnest, wit no hyperbole at all, as a person who fucking loves DoA5:
TTT2 2 bars = DoA5 4-5 bars
Maybe that's not a condemnation of DoA5's netcode, but a testament of how fucking amazing what Namco has done with their netcode. I just know that, of the big 4 3D fighters, DoA's netcode is by far the worst.