A method of locating traffic reduction entities in a communication network, optionally where at least one reduction entity is located within each network path which allows traffic flow between endpoints and central stations. The method comprises assigning a plurality of allocation cost values each estimating cost of locating of one of a plurality of traffic reduction entities on one of a plurality of intermediate nodes of a communication network, calculating a plurality of excess load cost values each calculated according to excess load cost between two adjacent intermediate nodes of the plurality of intermediate nodes, identifying a node set selected from the plurality of intermediate nodes using a target function based on the plurality of cost values and the plurality of excess load cost values, and outputting instructions for locating the plurality of traffic reduction entities on the communication network according to the node set.