MPLS L3 VPN

1. The problem with VRFs is that you have to create them everywhere. When our goal is to have connectivity between CE1 and CE3 then we will have to add a VRF on the PE1, P and PE2 router. Also, all the service provider routes will have to participate with routing.

2. We will use MP-BGP between the PE routers so that they can share information from the VRFs without run VRF at P routers.

The PE2 router will learn 192.168.1.0 /24 from the PE1 router but it has no clue to what customer it will belong. There is no way to differentiate if something belongs to customer A or B.

RD (Route Distinguisher)
To fix this issue, we will use a RD (Route Distinguisher). We will add something to the prefix of the customer so that it will become unique: The RD and the prefix combined is what we call a VPNv4 route. We now have a method to differentiate between the different prefixes of our customers.

RT (Route Target)
We use something called a RT (Route Target) to decide in which VRF we import and export VPNv4 routes.

Steps to Configure MPLS L3 VPN

02. MPLS LDP (Label Distribution Protocol)

Performing Neighbor Adjacency

(1) - First we send UDP multicast hello packets to discover other neighbors and used
multicast address 224.0.0.2 using source/destination UDP port 646. Each router has
a unique ID called the LSR (Label Switch Router) ID. This is similar to how most
protocols select an ID.

(2) - Once two routers decide to become neighbors, they build the neighbor adjacency using a TCP connection.

Key Notes:
LDP will only form a single neighbor adjacency, no matter how many interfaces you have in between your routers:

Verify 
show mpls interfaces
show mpls ldp neighbor
mpls label range 100 199 (assign label manually)
show mpls ldp bindings
show mpls forwarding-table
show mpls ldp discovery detail
show mpls ldp parameters
mpls ldp discovery hello interval 20
mpls ldp discovery hello holdtime 60

When you use traceroute on your MPLS devices then you can see the labels that we use. The path that we use here is called the LSP (Label Switched Path).

01. MPLS Labels and Devices

MPLS header is in between the Ethernet and IP header. That’s why we call it a “layer 2.5” protocol.
CE (Customer Edge) = Customer network device
PE (Provider Edge) = LER (Label Edge Router)
P (Provider) = LSR (Label Switch Router) or transit router

There are three actions we can perform with labels:

Label push: when we add a label to a packet, we call it a label push.
Label swap: replacing a label with another value is called a label swap.
Label pop: removing the label is called a label pop. ( penultimate hop popping)

Reference : Network Lessons