Service Congestion In A Nutshell
Congestion is the state in which network performance decreases. When too many packets are present in (a part of) the subnet, performance degrades. This situation is called congestion.When the number of packets dumped into the subnet by the hosts is within its carrying capacity, they are all delivered (except for a few that are afflicted with transmission errors) and the number delivered is proportional to the number sent. However, as traffic increases too far, the routers are no longer able to cope and they begin losing packets. This tends to make matters worse. At very high traffic, performance collapses completely and almost no packets are delivered.
Congestion can be brought on by several factors. If all of a sudden, streams of packets begin arriving on three or four input lines and all need the same output line, a queue will build up. If there is insufficient memory to hold all of them, packets will be lost. Adding more memory may help up to a point, but Nagle (1987) discovered that if routers have an infinite amount of memory, congestion gets worse, not better, because by the time packets get to the front of the queue, they have already timed out (repeatedly) and duplicates have been sent. All these packets will be dutifully forwarded to the next router, increasing the load all the way to the destination.
Slow processors can also cause congestion. If the routers' CPUs are slow at performing the bookkeeping tasks required of them (queueing buffers, updating tables, etc.), queues can build up, even though there is excess line capacity. Similarly, low-bandwidth lines can also cause congestion.

Congestion can be brought on by several factors. If all of a sudden, streams of packets begin arriving on three or four input lines and all need the same output line, a queue will build up. If there is insufficient memory to hold all of them, packets will be lost. Adding more memory may help up to a point, but Nagle (1987) discovered that if routers have an infinite amount of memory, congestion gets worse, not better, because by the time packets get to the front of the queue, they have already timed out (repeatedly) and duplicates have been sent. All these packets will be dutifully forwarded to the next router, increasing the load all the way to the destination.
Slow processors can also cause congestion. If the routers' CPUs are slow at performing the bookkeeping tasks required of them (queueing buffers, updating tables, etc.), queues can build up, even though there is excess line capacity. Similarly, low-bandwidth lines can also cause congestion.

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