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This work presents a novel rate-control model. Based on the famous heat conduction equation (HCE), a rate transmission equation (RTE) is proposed to describe the bit-rate behaviors during video coding. RTE is inherently the famous diffusion equation. A new rate-control model is derived from the special solution to RTE. Based on this model, a new rate-control scheme is proposed for MPEG-4 applications. Experiments show that the proposed scheme achieves a better buffer status and higher picture quality over the MPEG-4 Q2 scheme.