In ATM UBR networks supporting TCP traffic, optimal efficiency can only be envisaged if switches adopt a discard mechanism that operates at the packet level rather than the cell level. In this paper, we define a variant of the RED discard strategy suitable for ATM switches. An interesting feature of this ATM-RED is that it has a similar per-VC implementation complexity as the Early Packet Discard (EPD) algorithm. To study the efficiency of the ATM-RED discard strategy, we compare its performance with plain the UBR, EPD and Fair Buffer Acceptance (FBA) discard strategies by means of simulation with TCP/IP traffic. We give comparative results with respect to different performance criteria such as goodput and fairness in various environments, such as end-to-end ATM networks and IP-based networks with an ATM backbone, in both single-bottlenecked and GFC topologies.