Label Stack
VPLS MPLS packets have a two-label stack. The outer label is used for normal MPLS forwarding in the service provider's network. If BGP is used to establish the VPLS, the inner label is allocated by a PE as part of a label block. If LDP is used, the inner label is a virtual circuit ID assigned by LDP when it first established a mesh between the participating PEs. Every PE keeps track of assigned inner label, and associates these with the VPLS instance.
Read more about this topic: Virtual Private LAN Service
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