A system and method for optimizing data flow through a node in a network system, where messages forwarded to the node have one of at least two priorities, a normal priority and a high priority. A novel token bucket approach allows maintaining Quality of Service (Qos) while maximizing throughput. Token buckets include normal and high-priority levels, which reserve capacity for high priority bursts of data. Messages for which not enough tokens are present are marked as not protected against loss, and dropped or sent on depending on a mode. Two-stage policing using two levels of token buckets is also presented. Each flow into a node or router has an associated token bucket, with normal and high priority levels. A second aggregate token bucket then re-tests all messages which were considered protected against loss from the first stage. Messages can be marked not protected against loss and sent out appropriately (for example, marked CLP-1 in an ATM VBR-tagged system), or dropped. Also, messages which were marked not protected against loss at the first stage can be marked protected against loss based on a headroom threshold, which allows excess token bucket capacity to be used passing messages which would normally be dropped.
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