Rate scalable video compression techniques are very attractive,because they are able to encode the video in embedded way that makes thedecoding process more flexible to the bandwidth changes. Embeddedwavelet coding technology plays an important role in this area.Traditional wavelet transforms are globally optimized. It is veryefficient to code the natural images where sudden transitions rarelyexist. On the other hand, video compression mostly deals with thedifferences between adjacent frames, also known as delta frames.Unfortunately, commonly used wavelet transforms are not so efficient ondelta frame coding. We present a new wavelet coding technique - flexibleblock wavelet coding (FBWC). It is specially designed for delta framecompression. FBWC not only makes delta frame compression more efficientbut also keeps the rate scalability of wavelet based rate scalable videocompression techniques, and other scalabilities as well. Based on thisnew delta frame compression technique, we implement a highly efficientrate scalable video codec. Its overall performance surpasses the videocodec based on SPIHT and is comparable to that of H.263
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