Ideally, video streaming systems should provide the best quality video a user's device can handle without compromising on downloading speed. In this article, an improved video transmission system is presented which dynamically enhances the video quality based on a user's current network state and repairs errors from data lost in the video transmission. The system incorporates three main components: Scalable Video Coding (SVC) with three layers, multicast based on Receiver Layered Multicast (RLM) and an UnEqual Forward Error Correction (FEC) algorithm. The SVC provides an efficient method for providing different levels of video quality, stored as enhancement layers. In the presented system, a proportional-integral-derivative (PID) controller was implemented to dynamically adjust the video quality, adding or subtracting quality layers as appropriate. In addition, an FEC algorithm was added to compensate for data lost in transmission. A two dimensional FEC was used. The FEC algorithm came from the Pro MPEG code of practice #3 release 2. Several bit errors scenarios were tested (step function, cosine wave) with different bandwidth size and error values were simulated. The suggested scheme which includes SVC video encoding with 3 layers over IP Multicast with Unequal FEC algorithm was investigated under different channel conditions, variable bandwidths and different bit error rates. The results indicate improvement of the video quality in terms of PSNR over previous transmission schemes.