A method and system for scalable delivery of compressed video data over a communications network which is dynamically adaptable to network congestion conditions. A frequency domain encoding algorithm is used to encode/compress the video data which generates frequency domain coefficients and motion vectors representing the video. The DC coefficients, motion vectors and header data required for decoding are stored in a base-file, and the AC coefficients are split into ordered groups and stored in separate delta-files. During transmission the base-file is always sent, which itself can provide a low level of video quality when decoded. Depending upon network conditions, as many of the delta-files containing the AC coefficients as possible or desirable can be dynamically multiplexed with the base-file to provide for greater quality video. The network conditions can be determined by monitoring the packet loss ratio on the network, for example.
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