Your video file is interlaced, not progressive-scan. That visual effect is due to the field interlacing.
Best option is to get a deinterlaced version of the source video.
You can also right-click the media source in the Sources list, go to Deinterlacing, and try out the different deinterlacing methods there. These may not work if the video has been rescaled without being deinterlaced first by whatever was used to rescale it, and really should only be used in a pinch. Much better to use the deinterlacing functions in a video editing suite to fix the file itself.