†4 Congestion remains one of the main obstacles to the Quality of Service (QoS) on the Internet. We think that a good solution to Internet congestion should optimally combine congestion signaling from network and source reaction, with the following as its main goals: minimum losses and delays, maximum network utilization, fairness among flows, and last but not least, scalability of the solution. The solution should not significantly increase the complexity of router operations. In this paper, we present a new traffic management scheme based on an enhanced Explicit Congestion Notification (ECN) mechanism. Our Multilevel ECN (MECN) conveys more accurate feedback information about the network congestion status than the current ECN. We have designed a TCP source reaction that takes advantage of the extra information provided about congestion. Therefore, MECN responds better to congestion by allowing the system to reach the stability point faster, which results in better network performance. We use control theoretical tools verified by ns2 simulations to show that MECN can outperform up to twenty times in term of throughput the de facto standard RED/ECN.