The flow/congestion control scheme of TCP is based on the sliding window mechanism. As we demonstrate in this paper, the performance of this and other similar end-to-end flow control schemes deteriorates as networks move to the gigabit range. This has been the motivation for our search for a new flow and congestion control scheme. In this paper, we propose as an alternative, a hop-by-hop rate-based mechanism for congestion control. Due to the increasing sophistication in switch architectures, to provide “quality of service” guarantees for real-time as well as bursty data traffic, the implementation of hop-by-hop controls has become relatively inexpensive. A cost-effective implementation of the proposed scheme for a multi-gigabit packet switch is described in [2]. In this paper, we present results of a simulation study comparing the performance of this hop-by-hop flow control scheme to two end-to-end flow control schemes. The results indicate that the proposed scheme displays stable behavior for a wide range of traffic conditions and diverse network topologies. More importantly, the performance of the scheme, measured in terms of the average number of occupied buffers, the end-to-end throughput, the network delay, and the link utilization at the bottleneck, is better than that of the end-to-end control schemes studied here. These results present a convincing case against popular myths about hop-by-hop control mechanisms.