In local loss recovery schemes, a small number of recovery nodes distributed along the transmission paths save incoming packets temporarily in accordance with a specified cache policy and retransmit these packets if they subsequently receive a request message from a downstream receiver. To reduce the recovery latency, the cache policy should ensure that the recovery nodes are always able to satisfy the retransmission requests of the downstream receivers. However, owing to the limited cache size of the recovery nodes and the behavior of the cache policy, this cannot always be achieved, and thus some of the packets must be retransmitted by the sender. Accordingly, this paper develops a new network-coding-based cache policy, designated as network-coding-based FIFO (NCFIFO), which extends the caching time of the packets at the recovery nodes without dropping any of the incoming packets. As a result, the lost packets can be always recovered from the nearest recovery nodes and the recovery latency is significantly reduced. The loss recovery performance of the NCFIFO cache policy is compared with that of existing cache policies by performing a series of simulation experiments using both a uniform error model and a burst error model. The simulation results show that the NCFIFO cache policy not only achieves a better recovery performance than existing cache policies, but also provides a more effective solution for managing a small amount of cache size in environments characterized by a high packet arrival rate. . He teaches communication courses and his research interests include wired and wireless network protocol design, network security, and network management. He is currently involved in funded research projects dealing with network security testbeds, common criteria, intrusion prevention systems, and performance in router active queue management, VoIP security and IP QoS architectures. He is the Director of the