Re-listening you are correct, and it's only competitive. Lockstep is still inherently limited to 3 frames minimum for inputs to be pressed and then processed, while asynch has only 1 frame. This is regardless of how much bandwidth either is using. I guess I was thinking about voice chat bandwidth or something, since it was so restricted in 3.
Trade off here being asynch AI = each AI has the bandwidth cost of a normal player, so if you have 4 players and 12 enemies on the field, you're in BTB territory for latency. Lockstep theoretically supports infinite AI, only limited by the power of your hardware. You'd hit MS's bandwidth restrictions well before you got to Reach's max AI count in asynch Firefight/SPOPS.
Also, for the record - it's possible to do drop in as well under lockstep.
I apologize if I was a bit curt the last time we had this discussion.
I wasn't exactly a saint.
Thanks for the details. I'm really interested to see what 343 is doing with the net code for Spartan Ops; it's one of those critical unaddressed details.