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Broadcast television and home entertainment have been revoluTIonised by the advent of digital TV andDVD-video. These applicaTIons and many more were made possible by the standardisaTIon of videocompression technology. The next standard in the MPEG series, MPEG4, is enabling a new generaTIonof internet-based video applications whilst the ITU-T H.263 standard for video compression is nowwidely used in videoconferencing systems.MPEG4 (Visual) and H.263 are standards that are based on video compression (“video coding”)technology from circa. 1995. The groups responsible for these standards, the Motion Picture ExpertsGroup and the Video Coding Experts Group (MPEG and VCEG) are in the final stages of developinga new standard that promises to significantly outperform MPEG4 and H.263, providing bettercompression of video images together with a range of features supporting high-quality, low-bitratestreaming video. The history of the new standard, “Advanced Video Coding” (AVC), goes back atleast 7 years.After finalising the original H.263 standard for videotelephony in 1995, the ITU-T Video CodingExperts Group (VCEG) started work on two further development areas: a “short-term” effort to addextra features to H.263 (resulting in Version 2 of the standard) and a “long-term” effort to develop anew standard for low bitrate visual communications. The long-term effort led to the draft “H.26L”standard, offering significantly better video compression efficiency than previous ITU-T standards. In2001, the ISO Motion Picture Experts Group (MPEG) recognised the potential benefits of H.26L andthe Joint Video Team (JVT) was formed, including experts from MPEG and VCEG. JVT’s main taskis to develop the draft H.26L “model” into a full International Standard. In fact, the outcome will betwo identical) standards: ISO MPEG4 Part 10 of MPEG4 and ITU-T H.264. The “official” title of thenew standard is Advanced Video Coding (AVC); however, it is widely known by its old working title,H.26L and by its ITU document number, H.264 [1].