e.g. Spanning Tree Protocol (STP). VPLS is thus a more reliable solution for linking together Ethernet networks in different locations than simply connecting a WAN link to Ethernet switches in both locations. VPLS has significant advantages for both service providers and customers. Service providers benefit because they can generate additional revenues by offering a new Ethernet service with flexible bandwidth and sophisticated service level agreements (SLAs). VPLS is also simpler and more cost-effective to operate than a traditional service. Customers benefit because they can connect all of their sites to an Ethernet VPN that provides a secure, high speed and homogenous network. Moreover, VPLS provides a logical next step in the continuing evolution of Ethernet from a 10 Mbit/s shared LAN protocol to a multi-Gbps global service. Label stack VPLS MPLS packets have a two-label stack. The outer label is used for normal MPLS forwarding in the service provider's network. If BGP is used to establish the VPLS, the inner label is allocated by a PE as part of a label block. If LDP is used, the inner label is a virtual circuit ID assigned by LDP when it first established a mesh between the participating PEs. Every PE keeps track of assigned inner label, and associates these with the VPLS instance. Ethernet emulation PEs participating in a VPLS-based VPN must appear as an Ethernet bridge to connected customer edge (CE) devices. Received Ethernet frames must be treated in such a way as to ensure CEs can be simple Ethernet devices. When a PE receives a frame from a CE, it inspects the frame and learns the CE's MAC address, storing it locally along with LSP routing information. It then checks the frame's destination MAC address. If it is a broadcast frame, or the MAC address is not known to the PE, it floods the frame to all PEs in the mesh. Ethernet does not have a time to live (TTL) field in its frame header, so loop avoidance must be arranged by other means. In regular Ethernet deployments, Spanning Tree Protocol is used for this. In VPLS, loop avoidance is arranged by the following rule: A PE never forwards a frame received from a PE to another PE. The use of a full mesh combined with split horizon forwarding guarantees a loop-free broadcast domain. Scalability VPLS is typically used to link a large number of sites together. Therefore, scalability