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The recently developed H.264/AVC encoder compresses video significantly more efficiently than previous encoders and is expected to be used for compressing the majority of video transported over communication networks. The traffic characteristics of encoded video have a significant impact on the network transport of compressed video, making it very important to study the characteristics of H.264/AVC video traffic. In this article, we examine the bit-rate distortion performance, bit-rate variability, and long-range dependence of the H.264/AVC encoder for long videos up to high-definition resolution. We also explore the impact of smoothing on the H.264/AVC video traffic. We find that compared to the MPEG-2 and MPEG-4 Part 2 encoders, H.264/AVC achieves lower average bit rates for a given video quality at the expense of significantly increased traffic variability that remains at high levels even with smoothing.