Understanding the Problem: Overlapping Customer IPs
Service providers face a challenge when multiple customers use the same private IP address ranges (e.g., 10.x.x.x). Without a mechanism to make these routes unique, the network cannot correctly deliver traffic. This is where Route Distinguishers (RDs) solve the problem.
Route Distinguisher (RD): Making Routes Unique
- An RD is a 64-bit value prepended to an IPv4 prefix, creating a globally unique VPNv4 route within the MPLS infrastructure.
- Format: Typically written as two 32-bit numbers separated by a colon (e.g.,
100:20). The first number often represents the BGP ASN, while the second is an arbitrary identifier. - Configuration: Each VRF on a PE router is assigned an RD. When the PE advertises a customer route via iBGP, it prepends the VRF’s RD to the IPv4 prefix.
- Example: Customer route
10.10.20.0/24from VRF BLUE with RD100:20becomes VPNv4 route100:20:10.10.20.0/24.
VPNv4 Routes and MP-BGP
- VPNv4 route = 64-bit RD + 32-bit IPv4 prefix = 96-bit address family.
- These routes are exchanged between PE routers using Multi-Protocol BGP (MP-BGP).
- The iBGP update contains:
- The VPNv4 route (RD + prefix)
- The next-hop IP address of the advertising PE
- A VPN label (a local MPLS label assigned by the advertising PE)
Control Plane vs. Data Plane: The iBGP update shares routing information (control plane), not user data. The VPN label is used later when forwarding actual packets.
To understand how the underlying MPLS network transports these VPN labels, it helps to first understand MPLS Explained: What Is Multi-Protocol Label Switching? (Simple Guide).
How PE1 Receives the Route
When PE1 receives the MP-BGP update from PE2, it learns:
- Destination:
100:20:10.10.20.0/24(unique VPNv4 route) - Next hop: PE2’s IP address
- VPN label: 19 (assigned by PE2)
PE1 now has all the information needed to forward traffic to CE3’s network, but it still needs to know which local VRF to associate the route with.
Route Target (RT): Controlling Import/Export
- An RT is a 64-bit BGP extended community value, written in the same
ASN:numberformat (e.g.,100:30). - Purpose: Determines which VRF on a PE should import or export a VPNv4 route.
- Configuration: Each VRF has an import RT and an export RT (often the same value for simplicity).
- When PE2 advertises the route from VRF BLUE, it attaches the export RT (e.g.,
100:30) as a BGP extended community.
How RTs Enable Correct Assignment
- PE2 exports the VPNv4 route with RT
100:30. - PE1 receives the route and checks its VRF import RTs.
- Only the VRF BLUE (configured with import RT
100:30) accepts the route. - PE1 installs the route in VRF BLUE and advertises it to CE1.
Without RTs, PE1 would have two VPNv4 routes (one for BLUE, one for GREEN) with no way to associate them to the correct customer VRF.
Summary: How MPLS L3VPN Ties It Together
The complete MPLS VPN solution uses:
- VRFs: Separate routing instances per customer on the PE
- RDs: Create unique VPNv4 routes from overlapping customer IPs
- MP-BGP: Exchanges VPNv4 routes (with RD, next-hop, and VPN label) between PEs
- RTs: Control which VRF imports/exports which VPNv4 route
- Underlying IGP + LDP: Provide label-switched paths between PEs for next-hop reachability
The exchange of VPNv4 routes via MP-BGP relies on a BGP session between PEs, which is further explained in How BGP Is Used in the MPLS Core: Edge Routing Explained.
The result is a scalable, secure Layer 3 VPN service where multiple customers share the same provider network while keeping their traffic fully isolated.
Hello! This is Lazarus at telecomTech, where telecom and networking technologies... are simply explained! Today we'll be simply explaining route distinguishes, route targets, and VPNv4 routes in the context of MPLS. Νow this video is a part of a series on MPLS that starts from scratch,
where each video builds on the next one. So if you haven't yet seen the previous videos in this series, it's a good idea to do so at some point, so that you can get the full benefit of the information I share here today. Also, subscribe, enable notifications to be informed of new videos,
and like this video if you like this video. In the previous video we introduced virtual routing and forwarding instances or VRFs, and we touched a bit upon how they are used in the context of MPLS to separate one customer's traffic from that of another.
We saw how these VRFs are configured on the PE routers, one for each customer network connected there. Now we know that the PE routers use BGP to talk to each other on the MPLS network, where the next hop IP of the iBGP peer is advertised using iBGP peerings. MPLS labels,
in turn, are assigned to those next hop IPs so that the PEs can find each other using label switching. The last piece of the puzzle however is this: How does PE1 here know to which PE it should send the packets that are destined for the network behind CE2? What mechanism is used
to match up the VRF associated with that customer with the appropriate destination PE? We would like to use the IP address of the customer ideally, however the problem is that these addresses are not unique! Notice here how these two customers have used the same IP address ranges. In order
to give customers the freedom of using whatever IP address ranges they choose, we need something else to make these destinations unique. To do this, we use what are called route distinguishers or RDs. RDs are 64-bit values that are prepended to these routes to make them unique within this MPLS
infrastructure. How is that done? Well, let's take a look! We'll be examining how this network here is advertised, such that PE1 here will learn about it appropriately, and in turn, it will inform CE1 of that network. Now keep in mind that everything we're going to be looking at here is on the
control plane. No user data is being exchanged! We're just talking about the advertising of networks. So initially CE3 here informs PE2 about its 10.10.20.0/24 network using whatever routing protocol is configured between these two devices. Once PE2 receives this, it takes a look at the
VRF on which the interface is configured and it checks to see what RD corresponds to that VRF. The RD is something we configure ourselves. We see that the VRF BLUE corresponds to RD 100:20. Now this RD value is a 64-bit number, but we often write it in this format with two 32-bit
numbers separated by a colon. The first number is that of the BGP ASN which in our case is 100, and the second number is an arbitrary number. Now you can actually use any values you like within the range but the use of the ASN is simply a convention that is often followed. For now
keep in mind that this simply corresponds to a 64-bit value. So this is our RD for VRF BLUE. What happens next? When PE2 sends out its iBGP update, it will prepend that RD to the prefix it shares like so, and it will place that within the iBGP update. So now, when PE1 receives this,
it receives a route with a unique prefix along with the next hop IP of PE2. Now there's a name we give to this combination of the 32-bit IP address with the 64-bit prepended RD, and that's called a VPNv4 route, which is unique to the whole of this MPLS infrastructure. We now have a method to
differentiate between the advertised prefixes of our customers. Now take a look at this here we see the routes to the BLUE and GREEN customers being advertised with the RDs prepended. They use the corresponding RD for the VRF in question that's configured in PE2 before being advertised over
the iBGP peering. Now along with the VPNv4 routes which are composed of that RD and the IPv4 prefix, these iBGP updates between PE routers contain some more information. This is one of the reasons why the protocol being used to share this information is called multi-protocol BGP, because it's not
just the IP protocol that's being advertised, but additional information that corresponds to other protocols. Specifically, we are sharing the RD and the IPv4 prefix which, as we said, constitute the VPNv4 route. We advertise the next hop IP address of the advertising PE router which
is PE2 in our case, and we also advertise one more piece of information: we advertise the VPN label. Now what is the VPN label? This is where our VRFs meet MPLS labels! Well, let me just reiterate again that we are still talking about the control plane. We're not talking about user data. This is
not the header of a data packet. We're talking about route information that's contained within the iBGP update. Now the VPN label is actually a piece of information that's used on the data plane so when PE1 receives this iBGP update, it gets the following information: The RD and the IPv4 prefix
which together constitute the VPNv4 route, the iBGP next hop IP, which is that of the iBGP peer that has advertised the route, as well as that new VPN label that we talked about. In this case, the VPN label has a value of 19. So now PE1 has all the information it needs to send user data
to this destination on CE3. Now our PE1 router has learned about both routes on CE3 and CE4 and it has them with the information like so. The only thing differentiating between the two is the RD. But that's fine because they are unique in the MP-BGP set of information as
destination routes. Now the PE1 router must share this information with the CE routers so that they know how to reach the intended destinations as well, but there's a problem. There's no information that tells our PE1 router which of the two VPNv4 routs belongs to which
customer! An additional piece of information is necessary, and that's where route targets come in. Now RTs are used to decide to which VRF we import and export VPNv4 routes on PEs. Like the RD, the RT is also a 64-bit value that is advertised between PE routers. It uses the same format of two
numbers separated by a colon, but the RT is not shared by default within the body of a BGP update like the RD is, but it is added as a BGP extended community value. For each VRF that we configure in our PE, we must also configure the corresponding RT that will be used to import and export VPNv4
routes. So when PE2 shares the iBGP update for the 10.10.20.0/24 network received from CE3, which is on VRF BLUE, it uses an RT of 100:30, and it puts that in the BGP extended community so that when that BGP update reaches PE1, it will use that RT of 100:30 to differentiate between the two routes,
and it will know that it must send that over to VRF BLUE. Thus the VPNv4 route must be exported to the CE1 router. Now both the RD and the RT must be configured on all PE routers that connect to this customer's devices so that the routes will be unique and so that VPNv4 routes will be imported
and exported to the appropriate customer devices. So as you can see, MPLS works with many different technologies: VRFs, RTs RDs, MP=BGP, an underlying IGP, as well as LDP in order to deliver a robust efficient network that provides Layer 3 VPNs over an MPLS infrastructure to separate the traffic of
many customers leveraging that ISP network. So that's MPLS and how it works with VRFs, route distinguishers, route targets, and VPNv4 routes. I hope this was helpful and enlightening for you! For now, I hope you found this video useful, and if you have, please click
that thumbs up button. If you have feedback or comments, please feel free to write them in the comments below. I always like reading them and responding to them. And please don't forget to subscribe and enable notifications so that you'll be informed of newly published videos. I'm Lazarus
at telecomTech, I hope this has been helpful for you, and I'd like to thank you for watching!
Service providers often have multiple customers using overlapping private IP addresses (e.g., 10.x.x.x). Without RDs, these routes would be identical and cause routing conflicts. An RD is a 64-bit value prepended to each IPv4 prefix, creating a globally unique VPNv4 route within the MPLS infrastructure. This ensures that even if customers use the same IP ranges, their routes remain distinct and routable.
A standard IPv4 route is 32 bits long, while a VPNv4 route is 96 bits long, consisting of a 64-bit Route Distinguisher (RD) combined with the original 32-bit IPv4 prefix. For example, customer route 10.10.20.0/24 from VRF BLUE with RD 100:20 becomes VPNv4 route 100:20:10.10.20.0/24. These VPNv4 routes are exchanged between PE routers using Multi-Protocol BGP (MP-BGP) to maintain uniqueness across overlapping customer networks.
An MP-BGP update for a VPNv4 route contains three critical elements: the VPNv4 route itself (RD + IPv4 prefix), the next-hop IP address of the advertising PE router, and a VPN label (a local MPLS label assigned by the advertising PE). The VPN label is used later in the data plane to forward actual packets, while the routing information is shared in the control plane.
While RDs make routes unique globally, RTs control which VRF on a PE router imports or exports a specific VPNv4 route. An RT is a 64-bit BGP extended community value (e.g., 100:30) configured on each VRF. When a PE exports a route, it attaches the export RT as a BGP community. The receiving PE then checks its import RT configurations to determine which VRF should accept the route. This ensures routes are correctly assigned to the appropriate customer VRF without cross-contamination.
Imagine PE2 advertises a route from VRF BLUE with export RT 100:30. PE1 receives this route and checks its VRF import RTs—only VRF BLUE (configured with import RT 100:30) accepts it. Without RTs, PE1 might have two VPNv4 routes (one for BLUE, one for GREEN) with no way to tell which belongs to which customer, potentially mixing traffic. RTs act as access control, ensuring each customer's routes stay within their designated VRF.
An MPLS L3VPN relies on five key components: VRF (separate routing instances per customer on PE routers), RDs (to create unique VPNv4 routes from overlapping IPs), MP-BGP (to exchange VPNv4 routes with RD, next-hop, and VPN labels between PEs), RTs (to control which VRF imports/exports routes), and an underlying IGP + LDP (to provide label-switched paths for next-hop reachability). Together, they create a scalable, secure Layer 3 VPN where multiple customers share the same provider network with full traffic isolation.
In the data plane, when PE1 receives a packet destined for 10.10.20.0/24 from CE1, it consults VRF BLUE's routing table. It finds the next hop as PE2's IP address and the VPN label 19 (assigned by PE2). PE1 then pushes the VPN label and an IGP label (for the LSP to PE2) onto the packet. The packet is label-switched through the MPLS core until it reaches PE2, which pops the IGP label, sees the VPN label, and forwards the packet to the correct CE interface based on that label.
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