Storm,
Is your internet speed really 7.2 Mbps? I only ask because I use a mobile broadband USB mobile phone dongle, and this shows as 7.2 Mbps - but that is the connection speed of the USB interface, not the Internet connection speed. Often I get dial up speeds only and that does cause problems running RB with the Network. Symptoms exactly as you say, all live contacts time out and disappear while the slow Internet connection tries to get the data.
So, I do think that this might be an issue with the connection speed.