The Distance is a calculated score (1-10) showing the likely proximity of any Internet issue(s) causing alerts. It is based on the differential performance characteristics between the Regional Reporting and Alerting regions (typically configured as the closest regions to the I/O Monitor). Note, at least two regions must be configured for a distance calculation.
A high score (8, 9, 10) indicates that the source of the problem is far away - deep in your ISP or beyond. A low score (1, 2, 3) points to an issue very close to your access connection (within your ISP), the access connection itself, or even a problem within your home such as your cable/DSL modem or router. The objective of the distance calculation is to reduce unnecessary troubleshooting by classifying issues into those that you probably have very little control over vs. those that you can actually work on and fix.
To better understand the concept, consider the common sense conclusions one draws from poor performance while surfing the web. If only one particular site is very slow or not working, but all others are normal and responsive, the problem is likely near that site. On the other hand, if every website is slow or unresponsive it is highly likely that the issue is close to the user and associated with a common component (i.e., the browser, the computer, the Wi-Fi quality, the ISP connection, etc).