In ATM networks, loss of video packets either due to random bit error in ce
ll header or due to network congestion has the greatest influence on pictur
e quality. if coding information is separated into most significant part (M
SP) and least significant part (LSP) and MSP packets take priority over LSP
packets, then the packet loss has only a small influence on picture qualit
y. This coding technique is called layered coding technique. If coding info
rmation is separated into different parts with different priorities, packet
loss will have a small influence on picture quality, in addition to a larg
e decrease in bandwidth. This new layered coding technique using discrete c
osine transform is discussed here. The influence of packet loss on picture
quality is described with the decoded picture along with mean square error.