A method and system for controlling traffic on a network. A congestion indicator is generated by network components in response to the flow of network traffic. The congestion indicator is received by a network peripheral node that has a threshold variable which controls the flow of traffic flowing from the network peripheral node. The threshold variable corresponding to the congestion indicator will be reduced in order to restrict the flow of traffic flowing from that network peripheral node. If more than one congestion indicator is received by the network peripheral node, then the threshold variable will continue to be reduced thereby further restricting network traffic. If no further congestion indicators are received, then the network peripheral node will terminate the Back-Off Period state of the threshold variable such that the threshold variable can then be increased and network traffic can increase.