L3 VPN addressing

In the case of L3 VPN a new structure of addressing is established, the customer routes are carried by the BGP, however if normal bgp was used then the customer CE routes will not be carried if overlapping address is used, as bgp will intall only one route for a particular destination ie the best route will be installed in the routing table however in L3 VPN the same PE might have two different VRF which might have the same destination prefix.

Hence a new address structure is used which is known as VPN-IPv4 address.

In this case to make the ipv4 address globally unique a 64 bit route distinguisher is added on the ipv4 address

Route Distinguisher+ip v4 address = vpn-ipv4 address

The purpose of the route distinguisher is to ensure that the ipv4 address is globally unique.

A route distinguisher consists of 64 bits an ipv4 address consists of 32 bits hence the full vpn-ipv4 address is 64+32=96 bits.

In the case of Type 0 the administrator subfield contains the AS number, this should ideally be a public AS number, use of private AS number is discouraged. 
Assigned number is the number assigned by the service provider.

In the case of Type 1

The administrator subfield must contain an ip address use of public ip address is preferred, assigned number is again assigned by the service provider.

It makes ample sense to assign the same RD to same VRF in different sites.

VPN-ipv4 addresses are only visible on the control plane of the provider network.

By default BGP will not transmit vpn-ipv4 routes as it is only designed to transmit ipv4 routes.

Hence to transmit vpn-ipv4 routes multiprotocol extensions of bgp must be enabled this feature is know mp-bgp.

Full mesh or equivalent of mpbgp is required to achieve this purpose.

PE to PE route exchange:-

The vpn label ie the inner label is exchanged with the help of mp-bgp.

T-LDP is never used for label signalling in this case.