Understanding MPLS Layer 3 VPNs
An MPLS Layer 3 VPN operates at the Layer 3 level of the OSI model, the Network layer. The VPN is composed of a set of sites that are connected over a service provider's existing public Internet backbone. The sites share common routing information and the connectivity of the sites is controlled by a collection of policies.
In an MPLS Layer 3 VPN, routing occurs on the service provider's routers. The provider routers route and forward VPN traffic at the entry and exit points of the transit network. The service provider network must learn the IP addresses of devices sending traffic across the VPN and the routes must be advertised and filtered throughout the provider network. As a result, Layer 3 VPNs require information about customer routes and a more extensive VPN routing and forwarding (VRF) policy configuration than a Layer 2 VPN. This information is used to share and filter routes that originate or terminate in the VPN.
The MPLS Layer 3 VPN requires more processing power on the provider edge (PE) routers than a Layer 2 VPN, because the Layer 3 VPN has larger routing tables for managing network traffic on the customer sites. Route advertisements originate at the customer edge (PE) routers and are shared with the inbound PE routers through standard IP routing protocols, typically BGP. Based on the source address, the PE router filters route advertisements and imports them into the appropriate VRF table.
The provider router uses OSPF and LDP to communicate with the PE routers. For OSPF, the provider router interfaces that communicate with the PE routers are specified, as well as the loopback interface. For the PE routers, the loopback interface is in passive mode, meaning it does not send OSPF packets to perform the control function.