350-501 Networking Practice Question
Which MPLS VPN technology allows a service provider to offer overlapping IP addresses to different customers while using a single routing table per VPN?
⚠ Common exam trap
Cisco often tests the distinction between Layer 2 VPN technologies (AToM, VPLS) and Layer 3 VPNs (MPLS L3VPN), so the trap here is that candidates confuse 'overlapping IP addresses' with 'overlapping MAC addresses' or assume any MPLS-based service can handle IP overlap, but only per-VPN routing tables (VRFs) in L3VPN provide that isolation.
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
✓
MPLS Layer 3 VPN (BGP/MPLS IP VPN)
D is correct because MPLS Layer 3 VPN (BGP/MPLS IP VPN) uses per-VPN routing tables (VRFs) to maintain separate forwarding instances for each customer. This allows overlapping IP addresses across different customers while keeping each VPN's routes isolated. The provider edge routers exchange VPNv4 routes using MP-BGP with route distinguishers (RDs) to make overlapping prefixes unique, and route targets (RTs) control which VRFs import/export those routes.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Any Transport over MPLS (AToM)
Why it's wrong here
AToM is for point-to-point layer 2 circuits.
- ✗
VPLS
Why it's wrong here
VPLS is a layer 2 VPN service.
- ✗
MPLS Traffic Engineering (TE)
Why it's wrong here
TE is for optimizing traffic paths.
- ✓
MPLS Layer 3 VPN (BGP/MPLS IP VPN)
Why this is correct
Uses VRFs to isolate routing per VPN.
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