Network Sales and Services Handbook (Cisco Press Networking Technology)

MPLS is a packet-forwarding technology using labels, instead of network addresses, to make routing and data forwarding decisions. MPLS implementations give routers greater efficiency than ATM switches for the forwarding of network traffic. MPLS enables routers to make forwarding decisions based on labels, avoiding the packet-by-packet look-ups used in conventional routing, such as those used on the Internet.

MPLS supports traffic engineering, enabling network service providers to eliminate multiple layers in the network backbone; for example, one network carrying ATM traffic and another network carrying IP traffic. Instead of running IP over ATM and configuring and maintaining both networks, MPLS enables the migration of ATM's functions to MPLS, possibly eliminating the underlying ATM protocol.

MPLS enables network service providers to segregate traffic, such as that from different customers, into separate VPNs. Although MPLS VPNs are not encrypted by the network service provider, the segregation of traffic provides a de facto separation of customer networks. MPLS gives network service providers better performance and better control over their networks.

In addition to VPN services, MPLS-TE, QoS and AToM.

MPLS is sometimes referred to as working at Layer 2.5 of the OSI Reference Model. As its name implies, MPLS can transport multiple network protocols across a network backbone, with the common implementation being IP over PPP/ATM.

In order for MPLS network customers to take advantage of multiple Class of Service (CoS) tunnels, priority or custom-queues must be configured on the customer's MPLS router/switch. Cisco IOS enables policing of these queues through CAR algorithms. CAR policies are often implemented on the CE device but can be implemented on the network service providers PE device, with agreements between the network service provider and the customer.