An encoder may have a compressed mode in which a stream of input characters may be encoded into code words. The encoder may have a transparent mode in which the output stream is substantially identical to the input stream. The encoder may switch from one mode to the other based at least in part upon a data compressibility test. The test may comprise comparing an N-segment sliding average of the number of bits required by the encoder in compressed mode to represent a segment of a fixed number of characters to the number of bits required by the encoder in transparent mode to represent the segment.