Abstract: A technique of allocating data cells by a segmentation and reassembly (SAR) controller for transmission on a network connection such as an asynchronous transfer mode (ATM) network connection provides a scaleable sustainable cell rate (SCR) when the sum of the SCRs of virtual circuit exceeds the connection bandwidth. In addition, bandwidth can be shifted from a VC which is using less than its allocated SCR to a VC that is exceeding its SCR. In addition, the method enables a VC to exceed it peak cell rate (PCR) to some extent. The method and system of the disclosed embodiment can also be employed to dynamically adjust SCRs and PCRs in a variable bandwidth channel and is programmable and thus more flexible and less expensive than possible hardware solutions.