Troubling extending wireless network with Time Capsule and Airport Extreme

I am trying to set up and extend a wireless network in my house, but it’s not working right. I have two Airport/Capsule units in the house:
2TB Time Capsule (Dual-Band II)
1 Airport Extreme (Dual Band)
I have the Verizon Fios router as my gateway to the internet, and also as my DHCP server. I have also tested the ethernet ports in my house to verify that they work, and that I can get a DHCP-issued IP address.
Now, my Verizon router has WiFI, and it’s still on. I am not using it though except to troubleshoot. So far as I understand, this should not cause a problem.
Base station setup
So I setup the TC to Create A New Wireless Network, on the ethernet network it’s on (Dlink switch plugged into Verizon router). I set it up in Bridge Mode (as opposed to having it dole out IPs, since the Verizon router does this already). The TC gets a valid IP, and my wireless device connect to it without a problem. I have checked “Allow this network to be expanded” under Wireless settings.
Extended station setup
The AE Dual-Band is plugged into the Ethernet, and is reset to Factory Settings. I name it “Airport Extreme 2” and I chose “I want Airport Extreme to join my current network.” The other two options are: “I want to create a new wireless network” and “I want to replace and existing base station or wireless router with Airport Extreme.”
I chose to “join,” I select “I want to connect Airport Extreme to my network using Ethernet to extend my existing wireless network.” The other options are to disable wireless entirely, or to “wirelessly join my current network.” On the next page it asks me to select the device or network that the Airport Extreme will connect to using the Ethernet. I set it to the Time Capsule.
Results:
Access near the Airport Extreme 2 is incredibly slow. Speedtest shows I am getting less than 1Mbps. Worse yet, my mail client won’t connect. It just times out.
What I had hoped was that the AE would connect via Ethernet to the network, and just bring the wireless network to the other side of the house. Instead it almost seems as though it is just re-amplifying the TC’s signal. Otherwise, why is performance so bad?
Thanks to anyone with some insight here!

Hello Kennuff. Welcome to the Apple Discussions!
Since you have the ability to connect all of the routers by Ethernet, there is no need to configure the Time Capsule (TC) & 802.11n AirPort Extreme Base Station (AEBSn) for a dynamic WDS (aka, extending a network). This option is only when the routers do NOT have an Ethernet connection between them.
Instead, you want to configure the TC & AEBSn in a "roaming" network. I suggest starting by performing either a "hard" or "factory default" reset on both.
Next be sure that both the TC & AEBSn are on the same Ethernet subnet coming from the Verizon-supplied router.
Configure the TC & AEBSn as follows:
AirPort Utility > Select the TC or AEBSn > Manual Setup > AirPort > Wireless
o Wireless Mode = Create a wireless network
o Allow this network to be extended: <not checked>
o Radio Mode: <leave the default or if you require a specific mode make sure both routers are configured the same>
o Wireless Security: <configure both routers the same>
AirPort Utility > Select the TC or AEBSn > Manual Setup > Internet > Internet Connection
o Connection Sharing = Off (Bridge Mode)

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    Update
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  • I would like to extend my network with time capsule

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