MC-EZBC is a fully scalable video coder using a motion-compensated 3-D subband/wavelet decomposition. Temporal filtering is performed along estimated motion trajectories to remove temporal redundancy. To get greatly increased motion compensation (MC) accuracy and increased coding efficiency, we use the lifting filter implementation. Additionally, we introduce unconnected blocks and spatial lowpass transition filtering (SLTF). This results in improved lower frame rate data for the scalable MC-EZBC coder. Finally, an optimized quantization strategy is introduced to compensate for variations in synthesis filtering for connected and unconnected pixels.