Introduction
Layer 2 vpn is being used by many of service providers. It can be configure in two ways, one way to use l2 vpn over ip cloud with the help of l2tpv3 and another way is to use over mpls backbone by using encapsulation mpls. In this simulation I will be covering how to configure l2 mpls vpn over mplsvpn cloud.

Figure 1

R0-CE and R4-CE is looking for l2 vpn so that the communication is possible between the both as
they are on same local area network.

How Layer2 MPLS Works
Service provider should use the mpls in the whole cloud to provision l2mpls vpn. The forwarding will be the same as it happens in the case of layer 3 vpn, the only difference is that in that case the customer pool is advertised via MP-iBGP which works as full mesh but in this scenario only point to point will work. If the customer is looking for point to multipoint in that case VPLS (Virtual Private Lan Services) need to be configured which requires minimum of 7600 series router with sip and spa card. In this scenario customer link is terminated on PE router and with the help of xconnect l2 vpn is configured. For every layer2 a unique vc (virtual circuit) is required and the label is generated for that vc only. In our example we are using 100 as vcid, which should be unique on both PEs. When ever the l2 session comes up a new ldp session is being established between the both PEs and the connection is virtually treated as directly connected connection. In simple ldp neighbourship, only directly connected peers can establish the LDP neighbourship but in l2 circuits we get the LDP neighbourship which are not directly connected.