MP3 (MPEG Layer III) developed by Fraunhofer Research (the leading MPEG research institute at Germany and also the people who build the MP3 codec for Internet Explorer), the algorithm is open and free for anyone to use. MP3 has become a source of great controversy as it facilitates the transfer of CD quality music on portable media and the internet. Despite the complains of commercial entertainers MP3 has become a standard in music broadcasting. Supported in popular packages like Winamp and Internet Explorer, MP3 only requires a 486 to play on average bitrates.

MP3 is still the top quality standard. It is difficult to separate the original from the compressed. However, lower bitrate MP3s suffer from a high frequency loss that becomes insufferable on anything less than 44kbps. MP3 files will not play clearly on phone line bitrates.

MP3 still develops. both Fraunhofer Research and the general public have presented algorithms that create much better results than previous encoders.