The classical max-min policy has been suggested by the ATM Forum to support the available bit rate (ABR) service class. However, there are several drawbacks in adopting the max-min rate allocation policy. In particular, the max-min policy is not able to support the minimum cell rate (MCR) requirement and the peak cell rate (PCR) constraint for each ABR connection. Furthermore, the max-min policy does not offer flexible options for network providers wishing to establish a usage-based pricing criterion. In this paper, we present a generic weight-based rate allocation policy, which generalizes the classical max-min policy by supporting the MCR/PCR for each connection. Our rate allocation policy offers a flexible usage-based pricing strategy to network providers. A centralized algorithm is presented to compute network-wide bandwidth allocation to achieve this policy. Furthermore, a simple switch algorithm using ABR flow control protocol is developed with the aim of achieving our rate allocation policy in a distributed networking environment. The effectiveness of our distributed algorithm in a local area environment is substantiated by simulation results based on the benchmark network configurations suggested by the ATM Forum.