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This paper describes the "explicit rate indication for congestion avoidance" (ERICA) scheme for rate-based feedback from asynchronous transfer mode (ATM) switches. In ERICA, the switches monitor their load on each link and determine a load factor, the available capacity, and the number of currently active virtual channels. This information is used to advise the sources about the rates at which they should transmit. The algorithm is designed to achieve high link utilization with low delays and fast transient response. It is also fair and robust to measurement errors caused by the variations in ABR demand and capacity. We present performance analysis of the scheme using both analytical arguments and simulation results. The scheme is being considered for implementation by several ATM switch manufacturers.