This paper presents Phantom, a simple constant space algorithm for rate-based flow control. As shown by our simulations, it converges fast to a fair rate allocation while generating a moderate queue length. While our approach can be easily implemented in ATM switches for managing available bit rate (ABR) traffic, it is also suitable for flow control in TCP router-based networks. Both the introduced overhead and the required modifications in TCP flow control systems are minimal. The implementation of this approach in TCP guarantees fairness and provides a unifying interconnection between TCP routers and ATM networks. The new algorithm easily inter-operates with current TCP flow control mechanisms and thus can be gradually introduced into installed-based TCP networks.