Abstract: A method and apparatus for providing ABR and UBR services with one FIFO queue. The queue accepts UBR data until a threshold queue capacity (EPD) is reached, at which point data is dropped. This threshold is dynamically adjusted by adding a value proportional to the difference between the actual UBR bandwidth and the target UBR bandwidth. Applications sending data for ABR service are provided with a feedback which allows those applications to regulate the speed at which data is transmitted to the queue, this feedback is a function of some threshold value (AQT) which is also dynamically adjusted as described above. If the queue is being underutilized, an adjustment is made to both EPD and AQT.