Layer 2 MPLS VPN

A Layer 2 MPLS VPN is a method that Internet service providers use to segregate their network for their customers, to allow them to transmit data over an IP network. This is often sold as a service to businesses. Layer 2 VPNs are a type of Virtual Private Network (VPN) that uses MPLS labels to transport data. The communication occurs between routers that are known as Provider Edge routers (PEs), as they sit on the edge of the provider's network, next to the customer's network.

BGP-based

The BGP-based type is based on a draft specification by Kireeti Kompella, from Juniper Networks. It uses the Border Gateway Protocol (BGP) as the mechanism for PE routers to communicate with each other about their customer connections. Each router connects to a central cloud, using BGP. This means that when new customers are added (usually to new routers), the existing routers will communicate with each other, via BGP, and automatically add the new customers to the service.

LDP-based

The second type is based on a draft specification by Vach Kompella (Alcatel-Lucent). This method is also known as a Layer 2 circuit. It uses the Label Distribution Protocol (LDP) to communicate between PE routers. In this case, every router will connect to every other router in the VPN, which differs from the BGP-based methodology.

Juniper Networks : LDP / BGP based (M/T/J/E-series)

Cisco Systems : LDP-based