The use of mechanisms based on incentives for controlling and managing network traffic of overlay applications in the Internet is still in its early stages. Initial results have shown that such mechanisms do have the important property of scalability with respect to the number of players (i.e. providers, consumers, or peers), and lead to a more efficient network operation. In managing the traffic created and routed through their networks today's ISPs (Internet Service Provider), who may be in more general terms service providers on the basis of the IP, employ methodologies suitable for traditional traffic/service profiles. In the near future most network traffic will follow paths that form logical network overlays at the service layer, such as Virtual Private Networks, Network Management System overlays, or distributed collaboration overlays. As the structure of overlays determines the traffic flows in ISP networks, it is highly efficient for an ISP to influence overlay configuration based on information on their structure. Overlay types have to be managed to (a) maximize the benefit for multiple operators/ISPs involved, independently of an underlying topology and (b) to be operated autonomously to increase the capability to withstand faults, and balancing the load in the network. SmoothIt supports self-configuration due to its decentralized nature and its dependence on economic methods (incentives). Traffic management over the whole network emerges through local interaction and cooperation, which in effect makes the system self-organizing:(1) New theory of Economic Traffic Management (ETM) based on incentives and pricing(2) New decentralized network control and management mechanisms for overlay services in Internet-based multi-domain networks(3) Enhanced and tailored security, accounting, and QoS mechanisms and mapping functions for overlay services(4) Solving the information asymmetry problem, by combined optimization of overlays and traffic through ETM.