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Wireless channels are characterized by high time-varying bit-error rates (BERs). To cope with this problem, several adaptive forward-error-correction (AFEC) schemes have been proposed in the literature. They work locally at the wireless link, adding a variable amount of redundancy to the transmitted data in order to maintain the packet error rate below an acceptable level. However, when such schemes are utilized, the bandwidth offered to the applications changes when channel conditions change. In this paper, the effects of these bandwidth variations are investigated in the case of real-time Motion Picture Experts Group (MPEG) video transmission. The MPEG encoder is controlled in order to adapt its emission rate to the current bandwidth offered by the wireless link. To this end, the encoding quality is diminished by the source rate controller when the transmission rate has to be decreased due to an increase in the channel BER, whereas it is improved when the transmission rate can be increased due to a decrease in the channel BER. A Markov-based model, denoted as SBBP/SBBP/1/K, has been introduced to model the scenario being considered. The analytical framework allows evaluation of the performance of the system and can be used to optimize the design of a video transmission system for wireless channels, providing the instruments to derive the tradeoff between information corruption in the wireless channel and MPEG video encoding quality.