diff --git a/engine/client/cl_main.c b/engine/client/cl_main.c
index 47c00a99..c2486c65 100644
--- a/engine/client/cl_main.c
+++ b/engine/client/cl_main.c
@@ -1597,6 +1597,9 @@ void CL_SetupNetchanForProtocol( connprotocol_t proto )
 		}
 		break;
 	default:
+		if( !Host_IsLocalClient( ))
+			SetBits( flags, NETCHAN_USE_LZSS );
+
 		cls.extensions = Q_atoi( Info_ValueForKey( Cmd_Argv( 1 ), "ext" ));
 
 		if( FBitSet( cls.extensions, NET_EXT_SPLITSIZE ))
diff --git a/engine/common/net_chan.c b/engine/common/net_chan.c
index 29f7c904..cdfbb350 100644
--- a/engine/common/net_chan.c
+++ b/engine/common/net_chan.c
@@ -341,6 +341,7 @@ void Netchan_Setup( netsrc_t sock, netchan_t *chan, netadr_t adr, int qport, voi
 	chan->split = FBitSet( flags, NETCHAN_USE_LEGACY_SPLIT ) ? true : false;
 	chan->use_munge = FBitSet( flags, NETCHAN_USE_MUNGE ) ? true : false;
 	chan->use_bz2 = FBitSet( flags, NETCHAN_USE_BZIP2 ) ? true : false;
+	chan->use_lzss = FBitSet( flags, NETCHAN_USE_LZSS ) ? true : false;
 	chan->gs_netchan = FBitSet( flags, NETCHAN_GOLDSRC ) ? true : false;
 
 	MSG_Init( &chan->message, "NetData", chan->message_buf, sizeof( chan->message_buf ));
@@ -766,7 +767,7 @@ static void Netchan_CreateFragments_( netchan_t *chan, sizebuf_t *msg )
 		Host_Error( "%s: BZ2 compression is not supported for server", __func__ );
 #endif
 	}
-	else if( !chan->use_bz2 && !LZSS_IsCompressed( MSG_GetData( msg ), MSG_GetMaxBytes( msg )))
+	else if( chan->use_lzss && !LZSS_IsCompressed( MSG_GetData( msg ), MSG_GetMaxBytes( msg )))
 	{
 		uint uCompressedSize = 0;
 		uint uSourceSize = MSG_GetNumBytesWritten( msg );
@@ -1173,7 +1174,7 @@ qboolean Netchan_CopyNormalFragments( netchan_t *chan, sizebuf_t *msg, size_t *l
 		p = n;
 	}
 
-	if( chan->use_bz2 && !memcmp( MSG_GetData( msg ), "BZ2", 4 ) )
+	if( chan->use_bz2 && !memcmp( MSG_GetData( msg ), "BZ2", 4 ))
 	{
 #if !XASH_DEDICATED
 		byte buf[0x10000];
@@ -1194,7 +1195,7 @@ qboolean Netchan_CopyNormalFragments( netchan_t *chan, sizebuf_t *msg, size_t *l
 		Host_Error( "%s: BZ2 compression is not supported for server\n", __func__ );
 #endif
 	}
-	else if( !chan->use_bz2 && LZSS_IsCompressed( MSG_GetData( msg ), size ))
+	else if( chan->use_lzss && LZSS_IsCompressed( MSG_GetData( msg ), size ))
 	{
 		uint	uDecompressedLen = LZSS_GetActualSize( MSG_GetData( msg ), size );
 		byte	buf[NET_MAX_MESSAGE];
@@ -1345,7 +1346,7 @@ qboolean Netchan_CopyFileFragments( netchan_t *chan, sizebuf_t *msg )
 		Host_Error( "%s: BZ2 compression is not supported for server", __func__ );
 #endif
 	}
-	else if( LZSS_IsCompressed( buffer, nsize + 1 ))
+	else if( chan->use_lzss && LZSS_IsCompressed( buffer, nsize + 1 ))
 	{
 		byte	*uncompressedBuffer;
 
diff --git a/engine/common/netchan.h b/engine/common/netchan.h
index c06391b1..b7f55e30 100644
--- a/engine/common/netchan.h
+++ b/engine/common/netchan.h
@@ -214,6 +214,7 @@ typedef enum netchan_flags_e
 	NETCHAN_USE_MUNGE = BIT( 1 ),
 	NETCHAN_USE_BZIP2 = BIT( 2 ),
 	NETCHAN_GOLDSRC = BIT( 3 ),
+	NETCHAN_USE_LZSS = BIT( 4 ), // mutually exclusive with bzip2
 } netchan_flags_t;
 
 // Network Connection Channel
@@ -285,6 +286,7 @@ typedef struct netchan_s
 	qboolean	split;
 	qboolean	use_munge;
 	qboolean	use_bz2;
+	qboolean	use_lzss;
 	qboolean	gs_netchan;
 } netchan_t;
 
diff --git a/engine/server/sv_client.c b/engine/server/sv_client.c
index 5cd5bb20..d819bb6d 100644
--- a/engine/server/sv_client.c
+++ b/engine/server/sv_client.c
@@ -305,6 +305,7 @@ static void SV_ConnectClient( netadr_t from )
 	int		challenge;
 	const char		*s;
 	int extensions;
+	uint netchan_flags = 0;
 
 	if( Cmd_Argc() < 5 )
 	{
@@ -431,7 +432,9 @@ static void SV_ConnectClient( netadr_t from )
 	newcl->listeners = -1;
 
 	// initailize netchan
-	Netchan_Setup( NS_SERVER, &newcl->netchan, from, qport, newcl, SV_GetFragmentSize, 0 );
+	if( !Host_IsLocalClient( ))
+		SetBits( netchan_flags, NETCHAN_USE_LZSS );
+	Netchan_Setup( NS_SERVER, &newcl->netchan, from, qport, newcl, SV_GetFragmentSize, netchan_flags );
 	MSG_Init( &newcl->datagram, "Datagram", newcl->datagram_buf, sizeof( newcl->datagram_buf )); // datagram buf
 
 	Q_strncpy( newcl->hashedcdkey, Info_ValueForKey( protinfo, "uuid" ), 32 );
@@ -450,8 +453,6 @@ static void SV_ConnectClient( netadr_t from )
 	newcl->delta_sequence = -1;
 	newcl->flags = 0;
 
-
-
 	// reset any remaining events
 	memset( &newcl->events, 0, sizeof( newcl->events ));