Under permit programs stemming from regulated riparian systems of water withdrawal control, significant quantities of water cannot be withdrawn from the stream without a withdrawal-constraining permit. There are two versions of such a permit system, one of which fixes the allowable withdrawal, the other of which allows withdrawals to vary directly with streamflows. However, both tie allowable withdrawal to streamflow at some level, the former simply shutting off all withdrawals when the streamflow breaches a low flow standard. Simple logic and the simulation of such systems with hydrologic models predict, in cases where the indexing gauge is downstream of the withdrawal point, the possibility of unstable feedback, leading to severe variability of both streamflow and allowable withdrawal. In this paper we characterize the streamflow variability with three indices, namely, flow crossing, flow reversal, and standard deviation, and compare the difference in those indices to represent the degree of the streamflow variability under the fixed flow and fractional flow withdrawal permit programs. Techniques based on control theory are proposed for modifying the fractional flow withdrawal program to reduce the streamflow variability. It is concluded that regulatory programs modified by inclusion of a first-order filter are able to reduce streamflow variability without significant sacrifice in net benefit or low flow frequency.