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Route Distinguishers
In MPLS VPN, the PE router provides isolation between customers by using VRFs. The
prefixes are propagated to the other PE routers with MP-BGP. The problem is that the
prefixes must be unique. If the customer has overlapping IP addressing, this situation would
cause a problem for BGP. To solve this problem, the concept of RD was conceived.
The basic idea behind the RD is that every customer receives a unique identifier to
distinguish between the same prefix from different customers. To create a unique prefix, the
RD is combined with the IPv4 prefix. The combination is called a VPNv4 prefix. MP-BGP
needs to carry these VPNv4 prefixes between the PE routers.
VPNv4 addresses are exchanged only between PE routers. They are never used between CE
routers.