This lecture explores the impact of quantization and data-rate limitations on networked control systems. It covers topics such as the encoding of real-valued vectors into bits, the trade-off between quantization accuracy and communication energy, and the challenges of designing stabilizing controllers under limited data rates. The instructor discusses the fundamental trade-off in network design, the effect of quantization on closed-loop stability and performance, and the graphical method for computing closed-loop systems. Examples of first-order systems and case studies are presented to illustrate the concepts discussed.