A power control scheme for a wireless network communication system that includes a base station and multiple wireless mobile device dynamically adjusts transmission power of a mobile device in conjunction with adjusting its bit allocation in source coding and channel coding to minimize its total power consumption while maximizing the system capacity in terms of the total effective transmission rates received by the base station. The base station sets a target signal quality value for each mobile station, and the target values are determined by the base station such that the total effective data rate from all the mobile devices is maximized under constraints of the total received power and the error protection level requirements for the mobile devices. The base station periodically measures a signal quality value, such as a signal-to-interference ratio (SIR), from transmissions received by the base from each mobile device, compares it with the measured signal quality value for that mobile device, and sends a control signal instructing the mobile device to increase or decrease its transmission power based on the result of the comparison. When the mobile device receives the control signal, it determines an amount of adjustment to its transmission power by performing a minimum calculation under constraints on the total data distortion and the maximum transmission rate to adjust the parameters for source coding, channel coding, and transmission under the constraints to result in a redistribution of power between the components that provides the minimized total power consumption.