A system and method for the implementation of fine-grained quality of service in a mobile telecommunications environment uses an Auto-IP Policy Decision Point (PDP) to determine what traffic optimizations actions should be taken in reaction to various network conditions. The Auto-IP PDP uses as inputs information from a G.sub.b interface probe to determine the user identification of an IP data flow, information from the radio access network (RAN) network management system (NMS) regarding network congestion. The cell traffic information is passed onto a traffic analysis and processing engine, the Auto-IP PDP which maps the real-time traffic information into an n-dimensional traffic model. An automated policy decision guiding algorithm is executed on the n-dimensional traffic model and selects policy based on the traffic and cell congestion conditions, without human intervention. Additionally, a consistency check is performed to ensure that new policies are consistent with existing policies. The policy decision outcome is forwarded to the Auto-IP Traffic Optimizer that acts on the network at a point in the network (G.sub.i) that is different from where traffic problem occurs in the RAN. The Auto-IP Traffic Optimizer implements the decisions of the Auto IP-PDP by performing traffic shaping, TCP window clamping or other traffic optimization procedures on a cell-by-cell basis.