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Subband coding is any form of transform coding that breaks a signal into a number of different frequency bands and encodes each one independently. It can be used with audio compression so that parts of the signal which the ear cannot detect are removed (e.g., a quiet sound masked by a loud one). The remaining signal is encoded using variable bit-rates with more bits per sample being used in the mid frequency range.
For example, subband encoding is used in MPEG-1.
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"Subband coding"