Multistage quantization is used to encode the intensity waveform in the most dominant subband. The reconstruction error in the first stage of the process is itself quantized and first-stage reconstruction is refined by removing from it the most objectionable components of quantized reconstruction error. The reconstruction error is coded on the basis of a bit allocation algorithm that utilizes the fact that perceptually significant error samples tend to occur in clusters in high-entropy parts of the input image frame. Application of this technique to a 512*512 monochrome image results in good communications quality at a rate of 0.5 bit per pixel for the simplest case of a two-band partition in horizontal and vertical frequencies, for a total of four subbands. By increasing the number of subbands to 16, significantly higher image quality can be realized at the same bit rate.<<ETX>>
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