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The ITU-T G.711.1 embedded wideband speech codec was approved by ITU-T in March 2008. This codec generates a bitstream comprised of three layers: a G.711 compatible core layer with noise shaping, a lower band enhancement layer and an MDCT-based higher band enhancement layer. It contains also an optional postprocessing module called Appendix I designed to improve quality of the decoded speech in case of interoperability condition with legacy G.711 encoder. The improvement is achieved by a novel low complexity PCM quantization noise reduction technique described in this article. Subjective test results show that the quality of the interoperability mode with the legacy G.711 codec is significantly better when the Appendix I is activated.