L2VPN is a solution for transporting Layer 2 traffic over an IP/MPLS backbone. It extends the usability of the IP/MPLS backbone by enabling it to offer both Layer 2 and Layer 3 services. It can accommodate many types of Layer 2 frames, including Ethernet, Frame Relay, ATM, PPP and HDLC.

Initially, Virtual Private Networks were built using leased lines. Service providers offered VPNs based on point-to-point data link layer connectivity, using ATM or Frame Relay virtual circuits. Customers built their own Layer 3 networks to accommodate IP traffic. As a result, separate networks exist for Layer 2 and Layer 3 traffic. But maintaining separate networks for Layer 2 VPNs, Layer 3 VPNs and Internet traffic is difficult and costly.

In order to maximise return on their assets and minimise operating costs, service providers look to consolidate multiple service types onto a single networking technology. As packet traffic takes up a larger and larger portion of the available network bandwidth, it becomes increasingly useful to optimise public networks for IP.

Although Internet traffic is the fastest growing traffic segment, Frame Relay traffic currently generates higher revenue per bit than native IP services do, and private line TDM services generate even more revenue per bit than Frame Relay. In addition, there is a tremendous amount of legacy equipment deployed within public networks that does not communicate using IP. Service providers continue to use non-IP equipment to deploy a variety of services, and therefore see a need to interconnect this legacy equipment over their IP-optimised core networks.

So as service providers move to converged IP/MPLS networks, they need a single infrastructure for delivering Layer2 (including transport) and Layer 3 services to their internal and external customers. L2VPN is an architectural framework for accomplishing that, regardless of whether the Layer 2 service is ATM, Frame Relay, Ethernet, PPP or HDLC. It encapsulates packets at the provider-edge router, transports them over the backbone to the provider-edge router on the other side of the cloud, removes encapsulation, and sends them to their destination.

The upgrade to L2VPN is transparent to customers, since it can be enabled on an existing MPLS network without major disruption. Unlike Layer 3 VPNs using MPLS, the service provider does not participate in the customer's Layer 3 routing, but provides Layer 2 connectivity only.

This solution has the following benefits:

  • A unified network for Layer 2 and Layer 3 VPNs means lower infrastructure and maintenance costs for the service provider. Using an IP or MPLS backbone enables the service provider to offer Layer 2 VPN services along with IP and Layer 3 VPNs in the same network. The service provider can support VPN traffic with other traffic (eg. Internet) on a single infrastructure..

  • Customer sites are independent of the service provider backbone, so problems on a customer network will not affect the backbone. The service provider backbone is more reliable when it is separate from the customer network.

  • MPLS uses frames or cells and is agnostic in its ability to accommodate protocols, so it can work in IP over ATM networks and IP over MPLS networks. Therefore, service providers can run IP over ATM networks and implement MPLS incrementally. Adding MPLS to the network in phases can be a better than converting all at once.

  • Core routers store a minimal amount of forwarding information, because MPLS core routers do not store any VPN information. And each PE router must store only the forwarding information of the VPNs to which it connects, so the service provider core network is not affected by the number of VPNs it services.

  • L2VPN can be combined with Quality of Service and Traffic Engineering to build new services, such as virtual leased lines that mimic existing Layer 2 services (ATM, Frame Relay), without compromising the scalability and flexibility of the MPLS networks on which they run.

  • Efficient use and operation of the IP/MPLS backbone.

    The Pseudo Wire Emulation Edge-to-Edge (PWE3) drafts define the signalling and encapsulation requirements for L2VPN to enable the following transports/modes: Ethernet VLAN, Ethernet port-to-port, ATM AAL5, ATM cell, Frame Relay, PPP, and HDLC. PWE3 is a mechanism that emulates the essential attributes of a service such as ATM, Frame Relay or Ethernet over a packet-switched network. Its required functions include encapsulating service-specific protocol data units arriving at an ingress port, carrying them across a path or tunnel, managing their timing and order, and any other operations required to emulate the behaviour and characteristics of the service as faithfully as possible.

    The growth of L2VPN will come from the following:

  • Legacy Layer 2 replacement markets. This segment is largely focused on incumbent carriers.

  • New deployment markets, where carriers will build out new network infrastructure to supply WAN connectivity for Metro Ethernet providers, carrier deployments for legacy transport, or new market expansion.

    To maximise the return on their assets and minimise their operational costs, many service providers will consolidate the delivery of multiple services and traffic types onto a single IP network. L2VPN provides a way to emulate existing telecommunications formats such as Ethernet, Frame Relay, and ATM over next-generation converged IP core networks.

    Syed Nawaz and Muhammad Waris Sagheer work for the high end routing organization within Cisco Systems, as a software development manager and a senior software engineer repectively. Both are specialists in L2VPN technologies.