Abstract: A system for adaptively transporting video over networks wherein the available bandwidth varies with time. The system comprises a video/audio codec that functions to compress, code, decode and decompress video streams that are transmitted over networks having available bandwidths that vary with time and location. Depending on the channel bandwidth, the system adjusts the compression ratio to accommodate a plurality of bandwidths ranging from 20 Kbps for POTS to several Mbps for switched LAN and ATM environments. Bandwidth adjustability is provided by offering a trade off between video resolution, frame rate and individual frame quality. The system generates a video data stream comprised of Key, P and B frames from a raw source of video. Each frame type is further comprised of multiple levels of data representing varying degrees of quality.