apsulation of one over the other. The premise at the time (the 1990s) was that switching IP packets was computationally expensive, whereas switching ATM cells was a relatively simple operation. Thus, it made sense to have a relatively simple ATM switch fabric at the core of a network, where datarates were high. The IP routers were placed nearer the edge, where IP integration was needed and where the forwarding speeds were not as high. An additional factor is that it is difficult for an operator to provide virtual private networks using a pure IP model (De Ghein, 2006). Consequently, it was advantageous for an operator to use ATM, with its comprehensive management support, to provide an overlay to customers that wanted a leased-line service to connect their remote IP networks. Figure 13.2 shows how IP routers can be connected over an overlay network. In this model the IP layer is completely unaware of the circuit-switched layer, which means that IP Router Switch (ATM) Fig. 13.2 IP connected over an overlay network (the switches could be ATM or other circuit-switching technology). Chapter 13 Multiprotocol Label Switching Ingress Egress Ingress Egress Fig. 13.3 Simplified diagram showing an ATM overlay supplying IP connectivity on two subnets, AB (a) and BC (b). Traffic between A and C has to pass through B even though it seems unnecessary given the physical connectivity. for N IP routers the number of IP peers is N(N - 1) or approximately N2. This can cause some problems for IP routing protocols when there is a change in topology (Davie, 2000) and can create additional configuration effort, particularly for VPNs (De Ghein, 2006). Although there are the aforementioned problems with overlay networks, in the 1990s it was very common to use this type of solution to interconnect IP networks, and it was also used in enterprise IP networks that utilized ATM backbones. However, it soon became clear that ATM and IP did not interoperate very well. ATM and IP have evolved separately and have very different control and managem