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Basically I think it's because Steam wants you to still have some bandwidth to browse the internet while downloading, so it's dinamically changing speed according to other processes that consume some amount of bandwidth.
As far as having a good download rate and then seeing a drop to 0, then back up again, that is usually due to the game at hand, as some games require decompression as they go, which means seeing "Busy Writing to Disk". When that is taking place, the download will appear to halt for a bit. It's normal with game downloading, such as Steam.