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Picture coding using pseudo-random noise

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In order to transmit television pictures over a digital channel, it is necessary to send a binary code which represents the intensity level at each point in the picture. For good picture quality using standard PCM transmission, at least six bits are required at each sample point, since the eye is very sensitive to the small intensity steps introduced by quantization. However, by simply adding some noise to the signal before it is quantized and subtracting the same noise at the receiver, the quantization steps can be broken up and the source rate reduced to three bits per sample. Pseudo-random number generators can be synchronized at the transmitter and receiver to provide the identical "noise" which makes the process possible. Thus, with the addition of only a small amount of equipment, the efficiency of a PCM channel can be doubled.

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Information Theory, IRE Transactions on  (Volume:8 ,  Issue: 2 )