In this paper we describe a rate-based OBS network architecture in which core switch nodes send explicit messages to edge nodes requesting them to reduce their transmission rate on congested links. Within this framework, we introduce a new contention avoidance mechanism called proportional control algorithm with explicit reduction request (PCwER). Through source rate control, PCwER proactively attempts to prevent the network from entering the congestion state. Basic building blocks and performance trade-offs of PCwER are the main focus of this paper. In addition, through a simple fluid model we analyze the characteristics of the algorithm. Our simulation results show that the proposed contention avoidance techniques improve the network utilization and reduce the packet loss probability