The MPEG-2 Video Standard describes in detail a bitstream syntax and a deco
der model but leaves many details of the encoding process unspecified, such
as encoder bit-rate control. The standard defines a hypothetical decoder m
odel, called the Video Buffering Verifier, that can operate in either const
ant-bit-rate or variable-bit-rate modes. In this paper, we present a low-co
mplexity algorithm for variable-bit-rate control suitable for low-delay, re
al-time applications. The algorithm is motivated by recent results in lexic
ographic optimal bit allocation. The basic algorithm switches between const
ant-quality and constant-bit-rate modes based on changes in the fullness of
the decoding buffer in the Video Buffering Verifier. We show how the algor
ithm can be applied either to produce a desired quality level or to meet a
global bit budget. Simulation results show that the algorithm compares favo
rably to the optimal lexicographic algorithm. (C) 1999 Academic Press.