L2TPv3 tunneling compared to MPLS

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L2TP and MPLS, although both are protocols for getting packets from one place to another, serve fairly different purposes. Multi-Protocol Label Switching (MPLS) is a routing protocol: packets are tagged with labels that allow routers to decide how to handle them. Different labels allow for different routing paths between endpoints, which can be used to implement different classes of service in the network. Layer 2 Tunneling Protocol (L2TP) is an encapsulation technique that allows packets to be transported between a pair of endpoints inside IP packets. Both MPLS and L2TP may be used to transport IP and non-IP protocols. MPLS may be used to implement a VPN, with network privacy ensured by controlling the routing of the packets, rather than by encryption. Because L2TP is intended for use in the public Internet, it is normally used with encryption (for example IPSec) to ensure privacy and authenticity.

MPLS is a relatively new protocol, and its success in the marketplace is still unknown. It is likely that there will continue to be a need for discriminated class of service routing in private backbone networks, and MPLS may well be the right solution. L2TP is a mature protocol serving the need for secure layer 2 transport via public IP, and is likely to be with us for a long time.