I believe the best you can do is polynomial, as the information about each player's actions or movements needs to be sent to every other player. Calculating what happens should be linear, but sending this information out, which is probably the problem, will be polynomial.

Also, I doubt it's the character names, titles, armor etc that's the problem. That has to be sent once each time the character becomes visible to your client, and from then only what changes needs to be sent. I'm guessing it's the combat events causing the problem. Blizzard's combat logs are very extensive; anything that happens is sent to every player in the vicinity, including who did it, what they did, who they did it to, whether they hit, how much damage they did, how much damage was resisted or blocked, when it happened etc. Even the simplest things, such as a tick of a DoT, a talent proccing or a buff fading will be sent. And you get this for EVERY player that's visible to your client. They don't need to be in your raid group, they don't have to be on your side, your client knows all that. If there are 100 people in the fortress and everyone gets all this information about everyone, there is of course going to be some lag.

To get an idea of how much information this is:

/run function g() print(arg2) end;if not f then f=CreateFrame("Frame");f:RegisterEvent("COMBAT_LOG_EVENT_UNFILTERED");f:SetScript("OnEvent",g); end

Run that macro once, then get into a large scale Wintergrasp battle. Every time any combat event is sent to you the type of event you got will be printed to your chat frame (the details won't be printed).

This is how you turn it off:

/run if f then f:UnregisterAllEvents();f=nil end

Not all of this was meant as a response to Seakochs, some of it is just general information. :)