A layer 3 MPLS VPN, also known as L3VPN, combines enhanced BGP signaling, MPLS traffic isolation and router support for VRFs (Virtual Routing/Forwarding) to create an IP based VPN. Compared to other types of VPN such as IPSec VPN or ATM, MPLS L3VPN is more cost efficient and can provide more services. Layer 3 MPLS VPNs are characterized by fully meshed architectures that enable, for instance, multicast conferencing in support of projects involving a dispersed work group.
Some businesses like the Layer 3 options that are available now because the service provider takes over all the WAN routing. Outsourcing of routing tables is also seen as a weakness of Layer 3 VPN services because many corporations don't want to relinquish control or even share their routing schemes with anyone, not even their service provider. They prefer Layer 2 network services that are simpler in architecture and that allow customers to retain control of their own routing tables
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