As your corporate data enters the carrier network, a 20 bit header called a label is appended to each packet. Labels can be used to convey several types of information about a packet, but probably the most frequent use of a label is to uniquely identify the Virtual Private Network in a shared infrastructure and keep it private. Used in this fashion, a label uniquely identifies a packet as belonging to a specific IP VPN. Upon reaching its destination, the label is removed, thereby returning the data packet to its original state. The process is seamless and unnoticeable to end-users. One can think of MPLS in this context as a “special delivery courier service” for the WAN.

The “label” thus replaces traditional IP packet forwarding, where complicated address matching is performed at each hop in the network. The label describes how the packet should be handled within the network and thus assigns the packet to a Forwarding Equivalence Class (FEC). As a packet traverses the network the intermediate nodes simply swap labels and forwards the packet based on the FEC, without ever examining the contents of the packet. Thus all packets which belong to the same FEC get treated in the same way and quickly are sped along their way. Label-swapping is considered to be more like ATM switching in its speed and simplicity. Packets are forwarded along a “label switched path (LSP)”, where each “label switch router (LSR)” makes forwarding decisions based solely on the contents of the label. At each hop, the LSR strips off the existing label and applies a new label that tells the next hop LSR how to forward the packet. Labels are distributed between LERs and LSRs using the “label distribution protocol” (LDP). Label Switch Routers in an MPLS network regularly exchange label and reachability information with each other using standardized procedures in order to build a complete picture of the network they can then use to forward packets. Label Switch Paths (LSPs) are established by the network operator for a variety of purposes, such as to create network-based IP Virtual Private Networks or to route traffic along specified paths through the network. In many respects, LSPs are no different than PVCs in ATM or Frame Relay networks, except that they are not dependent on a particular Layer 2 technology.

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