The use of scalable video with layered multicast has been shown to be an effective method to achieve rate control in heterogeneous networks. We propose the use of layered forward error correction (FEC) as an error-control mechanism in a layered multicast framework. By organizing FEC into multiple layers, receivers can obtain different levels of protection commensurate with their respective channel conditions. Efficient network utilization is achieved as FEC streams are multicast, and only to receivers that need them. Furthermore, FEC is used without overall rate expansion by selectively dropping data layers to make room for FEC layers. Effects of bursty losses are amortized by staggering the FEC streams in time, giving rise to a tradeoff between delay and quality. For rate control at the receivers, we propose an equation-based approach that computes network usage as a function of measured network characteristics. We show that equation-based rate control achieves more fair bandwidth sharing amongst competing sessions as compared to existing multicast rate control schemes such as RLM and RLC. Fairness is achieved since competing sessions sharing a path will measure similar network characteristics. Simulations and actual MBONE experiments are performed using error-resilient, scalable video compression. We find that video quality is significantly improved at the same communication rate when layered FEC is used.