Even though asynchronous transfer mode (ATM) seems to be clearly the wave of the future, one performance analysis indicates that the combination of stringent performance requirements (e.g., 10(-9) cell blocking probabilities), moderate-size buffers, and highly bursty traffic will require that the utilization of the network be quite low, That performance analysis is based on asymptotic decay rates of steady-state distributions used to develop a concept of effective bandwidths for connection admission control. However, we have developed an exact numerical algorithm that shows that the effective-bandwidth approximation can overestimate the target small blocking probabilities by several orders of magnitude when there are many sources that are more bursty than Poisson. The bad news is that the appealing simple connection admission control algorithm using effective bandwidths based solely on tail-probability asymptotic decay rates may actually not be as effective as many have hoped. The good news is that the statistical multiplexing gain on ATM networks may actually be higher than some have feared. For one example, thought to be realistic, our analysis indicates that the network actually can support twice as many sources as predicted by the effective-bandwidth approximation; this discrepancy occurs because for a large number of bursty sources the asymptotic constant in the tail probability exponential asymptote is extremely small. That, in turn, can be explained by the observation that the asymptotic constant decays exponentially in the number of sources when the sources are scaled to keep the total arrival rate fixed. We also show that the effective-bandwidth approximation is not always conservative. Specifically, for sources less bursty than Poisson, the asymptotic constant grows exponentially in the number of sources (when they are scaled as above) and the effective-bandwidth approximation can greatly underestimate the target blocking probabilities. Finally, we develop new approximations that work much better than the pure effective-bandwidth approximation.