Abstract: A scheme for determining the usage parameter control (UPC) values for an arbitrary traffic source from observations of its emitted cell stream is disclosed. The UPC values are used in a traffic shaping mechanism based on a dual leaky bucket, which shapes the cell stream by either discarding or delaying cells. The choice of UPC values is a function of the statistical characteristics of the observed cell stream; the user's tolerance for delay prior to the network access point; and the cost incurred on the network side. The chosen UPC values are then negotiated with the network. The source traffic characteristics may change dramatically over time, making the initially negotiated UPC descriptor inappropriate for the entire traffic stream. Hence, a method is disclosed for dynamically renegotiating UPC parameters whenever a predetermined change in traffic characteristics is detected.