This paper presents a new rate allocation algorithm for MCTF-based video coding with the aim to control quality fluctuation. Distortion analysis is conducted for MCTF using a simplified signal model. Based on the analysis, the aim to control quality fluctuation is posed as a quadratic programming problem and its solution forms the basis for our
proposed algorithm. After discussions on some extensions of the proposed rate allocation method, we verify it on MPEG SVC reference software and the experimental results demonstrate that the proposed rate allocation scheme can reduce quality fluctuation significantly.