PPPoE (Point-to-Point Protocol over Ethernet)

PPPoE (Point-to-Point Protocol over Ethernet) is a specification for connecting multiple computer users on an Ethernet local area network to a remote site through a modem and similar devices. PPPoE can be used to have an office or building-full of users share a common Digital Subscriber Line (DSL) service, cable modem, or wireless connection to the Internet.


PPPoE combines the Point-to-Point Protocol (PPP), commonly used in dialup connections, with the Ethernet protocol, which supports multiple users in a local area network. The PPP protocol information is encapsulated within an Ethernet frame.

PPPoE has the advantage that the Internet service provider (ISP) doesn't need to provide any special support. Unlike dialup connections, PPPoE uses DSL and cable modem connections, which are "always on."

Both the PPP and PPPoE protocols exist at the network access layer, also known as the data link layer, that supports network layer protocols, including IPv4 and IPv6.

Stages of PPPoE

PPPoE has two cleary defined stages: PPPoE discovery and the PPP session.

    -- PPPoE discovery

Since a number of different users are sharing the same physical connection to the remote service provider, a way is needed to keep track of which user traffic should go to and which user should be billed. PPPoE provides for each user-remote site session to learn each other's network addresses (during an initial exchange called "discovery").

    -- PPP session

Once a session is established between an individual user and the remote site (for example, an Internet service provider), the session can be monitored for billing purposes and data usage. Many apartment houses, hotels and corporations provide shared Internet access over DSL lines using Ethernet and PPPoE.

What is PPPoE used for?

Some ISPs use PPPoE to manage the connections of individual subscribers. Most broadbandrouters support PPPoE as an Internet connection mode. Some ISPs supply customers with a broadband modem with the necessary PPPoE support already configured. Many DSL providers use PPPoE. Cable and fiber Internet providers do not use it. Other providers, including wireless Internet service providers, may or may not use it. 

How PPPoE Works 

PPPoE uses a protocol such as the Point-to-Point Tunneling Protocol to embed messages in one format within the packets of another format. PPoE offers authentication, data encryption and data compression.


Dynamic Host Configuration Protocol (DHCP) is a communications protocol that lets network administrators centrally manage and automate the assignment of Internet Protocol (IP) addresses in an organization's network. DHCP allows network administrators to monitor and distribute IP addresses from a central point and automatically send a new IP address when a computer is plugged in somewhere else in the network.

DHCP is a way for a network to allocate unique IP addresses to devices on a network so that traffic can be delivered back and forth. PPPoE, which encapsulates network traffic based on credentialed access, such as a username and password), needs to be configured correctly before a user can connect to the internet. Modems that use DHCP don't need to be configured, as such.


Transmission Control Protocol (TCP) and Internet Protocol (IP) are two of the network protocols, or communications standards, that make the internet possible. IP defines how computers can get data to each other over an interconnected set of networks. TCP defines how applications can create reliable channels of communication across an IP network. They are typically referred together as TCP/IP.

Basically, IP defines addressing and routing, while TCP defines how to have a conversation across an IP-mediated link without garbling or losing data. Without DHCP configuration, TCP/IP network administrators must manually configure IP addresses when adding or moving devices from one subnet to another. DHCP architecture is usually made up of DHCP clients, DHCP servers and DHCP relay agents.

Maximum Transmission Unit

For networks to work correctly, they must be configured with the correct maximum transmission unit (MTU). The MTU is the largest size packet or frame, specified in octets (eight-bit bytes), that can be sent in a packet- or frame-based network such as the Internet. The Internet's TCP uses the MTU to determine the maximum size of each packet in any transmission. Too large an MTU size may mean retransmissions if the packet encounters a router that can't handle that large a packet. Too small an MTU size means relatively more header overhead and more acknowledgements that have to be sent and handled.

The recommended MTU for a network interface connected to a PPPoE network is generally considered to be a maximum of 1492.


PPPoE was developed by UUNET, Redback Networks and RouterWare and is available as an informational RFC 2516.

PPPoE Configuration 

Some ISPs supply their customers with a broadband modem with the necessary PPPoE support already configured.For those needing to set up the connection manually, the "setup" or "Internet" menus provided with the device provide the connection parameters. Administrators will need to know the PPPoE username, password, and MTU size.

This was last updated in April 2007

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