One of the most compelling drivers for MPLS in service provider networks is its support for Virtual Private Networks (VPNs), in which the provider’s customers can connect geographically diverse sites across the provider’s network.

There are three kinds of MPLS-based VPN:

Layer 3 VPNs: With L3 VPNs the service provider participates in the customer’s Layer 3 routing. The customer’s CE router at each of his sites speaks a routing protocol such as BGP or OSPF to the provider’s PE router, and the IP prefixes advertised at each customer site are carried across the provider network. L3 VPNs are attractive to customers who want to leverage the service provider’s technical expertise to insure efficient site-to-site routing.

Layer 2 VPNs: The provider interconnects the customer sites via the Layer 2 technology – usually ATM, Frame Relay, or Ethernet – of the customer’s choosing. The customer implements whatever Layer 3 protocol he wants to run, with no participation by the service provider at that level. L2 VPNs are attractive to customers who want complete control of their own routing; they are attractive to service providers because they can serve up whatever connectivity the customer wants simply by adding the appropriate interface in the PE router.

Virtual Private LAN Service: VPLS makes the service provider’s network look like a single Ethernet switch from the customer’s viewpoint. The attraction of VPLS to customers is that they can make their WAN look just like their local campus- or building-scope networks, using a single technology (Ethernet) that is cheap and well understood. Unlike traditional Metro Ethernet services built around actual Ethernet switches, service providers can connect VPLS customers from regional all the way up to global scales. So a customer with sites in London, Dubai, Bangalore, Hong Kong, Los Angeles, and New York can connect all his sites with what appears to be a single Ethernet switch.


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Enterprise networks primarily use BGP with their Internet Service Providers if they want to be multi-homed (connected to more than one ISP). A very common requirement in a multi-homed design is the primary/backup setup where the lower speed (or sometimes lower quality) link should only be used when the primary link fails.

Competent ISPs help their customers reach this goal by using BGP local preference within their network and giving the customers the ability to indicate the desired value of BGP local preference through BGP communities: if the route received directly from the customer has low local preference, all other routes are preferred, resulting in the desired traffic flow that avoids the backup link if at all possible as shown in the next diagram:

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