350-501 Services Practice Question
A service provider is deploying MPLS Layer 3 VPN and needs to ensure that BGP next-hop resolution works correctly for VPNv4 prefixes learned from a route reflector. The PE routers are directly connected to the RR via iBGP, and there is an IGP running within the MPLS core. Which condition must be met for the PE to install the VPNv4 prefix into its routing table?
⚠ Common exam trap
Cisco often tests the misconception that a directly connected next-hop or a VPN label for the next-hop is required, when in fact the critical condition is IGP reachability with an MPLS label for the BGP next-hop.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The next-hop must be reachable via the IGP with an MPLS label.
For a PE router to install a VPNv4 prefix learned from a route reflector into its routing table, the BGP next-hop (typically the remote PE) must be reachable via the IGP with an associated MPLS label. This ensures that the transport LSP exists to forward traffic toward the next-hop, which is required for MPLS L3VPN operation. Without an MPLS label in the IGP for the next-hop, the PE cannot build the necessary label stack and will not install the VPNv4 route.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
The next-hop must be reachable via the IGP with an MPLS label.
Why this is correct
MPLS LSP must exist to the next-hop for label imposition.
- ✗
The next-hop must be a directly connected interface.
Why it's wrong here
Direct connection is not a requirement; reachability via IGP is sufficient.
- ✗
The PE must have a VPN label for the next-hop.
Why it's wrong here
VPN label is for per-VRF forwarding, not next-hop resolution.
- ✗
The IGP must be IS-IS, not OSPF.
Why it's wrong here
Both IS-IS and OSPF are acceptable IGPs.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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