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MPEG-1 Audio Layer 3, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression. It is a common audio format for consumer audio storage, as well as a de facto standard of digital audio compression for the transfer and playback of music on digital audio players.

MP3 is an audio-specific format that was designed by the Moving Picture Experts Group as part of its MPEG-1 standard. The group was formed by several teams of engineers at Fraunhofer IIS in Erlangen, Germany, AT&T-Bell Labs (now a division of Alcatel-Lucent) in Murray Hill, NJ, USA, Thomson-Brandt, and CCETT as well as others. It was approved as an ISO/IEC standard in 1991.

The psychoacoustic masking codec was first proposed in 1979, apparently independently, by Manfred R. Schroeder, et al. from AT&T-Bell Labs in Murray Hill, NJ, and M. A. Krasner both in the United States. Krasner was the first to publish and to produce hardware for speech, not usable as music bit compression, but the publication of his results as a relatively obscure Lincoln Laboratory Technical Report did not immediately influence the mainstream of psychoacoustic codec development. Manfred Schroeder was already a well-known and revered figure in the worldwide community of acoustical and electrical engineers, and his paper had influence in acoustic and source-coding (audio data compression) research. Both Krasner and Schroeder built upon the work performed by Eberhard F. Zwicker in the areas of tuning and masking of critical bands, that in turn built on the fundamental research in the area from Bell Labs of Harvey Fletcher and his collaborators. A wide variety of (mostly perceptual) audio compression algorithms were reported in IEEE's refereed Journal on Selected Areas in Communications.
That journal reported in February 1988 on a wide range of established, working audio bit compression technologies, some of them using auditory masking as part of their fundamental design, and several showing real-time hardware implementations.





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