3Com Switch 8800 Configuration Guide Chapter 37 BGP/MPLS VPN Configuration37-73) Each P router on LSP forwards MPLS packets using exterior-layer label to thepenultimate-hop router, namely the P router before PE2. The penultimate-hoprouter extracts the exterior-layer and sends MPLS packet to PE2.4) PE2 looks up in the MPLS forwarding table according to the interior-layer label anddestination address to determine the egress interface for labeling operation andthe packet. It then extracts the interior-layer label and forwards through the egressinterface the IPv4 packet to CE2.5) CE2 looks up in the routing table and sends the packet in normal IPv4 packetforwarding mode to the site2.37.1.3 Nested BGP/MPLS VPN ImplementationWhen implementing a nested BGP/MPLS VPN, pay attention to the following items:z No address overlap is allowed between user's internal sub-VPNs.z To ensure the VPN routing information is correctly advertised over the backbonenetwork, the VPN-Targets of the user VPN and the internal sub-VPNs cannot beoverlapped and must be specified by the service provider.z The provider PE and the customer PE must be directly connected and cannotexchange VPNv4 route in Multihop-EBGP mode.Before configuring a nested BGP/MPLS VPN, you must complete the following tasks:z Configuring IGP on the MPLS backbone network (including provider PE and Prouters) to implement the IP connectivity on the backbone network.z Configuring basic MPLS capability on the MPLS backbone network.z Configuring MPLS LDP and setting up LDP LSP on the MPLS backbone network.z Configuring BGP on the MPLS backbone network (create EBGP peers betweenprovider PEs).z Configuring basic MPLS capability on user-end network (including customer PEs).37.1.4 Hierarchical BGP/MPLS VPN ImplementationAs PE is required to aggregate multiple VPN routes on a BGP/MPLS VPN, it is prone toforming a bottleneck in a large-scale deployment or in the case that PE capacity issmall.Hierarchical BGP/MPLS VPN divides an MPLS VPN into several MPLS VPNs in ahierarchical network structure. Each VPN takes on a role depending on its level. Thereare high performance requirements in routing and forwarding on the PEs at the higherlevel of MPLS VPN, because they are primarily used for connecting the backbonenetworks and providing access service for huge VPN clients. However, suchrequirements are relatively low for PEs at the lower level of the network as theyprimarily function to access the VPN clients at the edges. Congruous with the IPnetwork model, HoVPN model improves the scalability of BGP/MPLS VPN, and henceallows lower-layer MPLS VPNs comprising low-end equipment to provide MPLS VPNaccessing and interconnect through the high-end MPLS VPN backbone.