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A predictive proportional integral (PPI) control algorithm was proposed which combined the Smith predictor and Dahlin algorithm to alleviate the unfavorable influence on the performance of active queue management (AQM) brought by time delay in the Internet. PPI algorithm not only dealt with large delays' using Smith predictor, but also had fewer tuning parameters than the Smith predictor. A classical control theory method was introduced to analyze the stability of the system and the transients as well as the steady-state characteristics of the bottleneck queue with link capacity disturbances. The simulation results show the PPI algorithm's advantages through the disturbance experiments and comparison between random early detection (RED) and proportional integral (PI) algorithms.