L2TPv3 is a protocol for carrying Layer 2 (L2) frames (such as Ethernet, Frame Relay, ATM, and PPP) across an IP network. The L2TPv3 RFC specifies both control-plane and data plane functions. The L2TPv3 control plane is primarily responsible for the setup, management, and maintenance of individual L2TP sessions, while the data plane function deals with encapsulation, security, and forwarding procedures.

In L2TPv3, end points are of two types: L2TP Access Concentrator (LAC) and L2TP Network Server (LNS). In L2TP LAC, a one-to-one mapping exists between a L2 attachment circuit (such as an Ethernet port or a VLAN) and an L2TP session. A LAC is simply a cross-connect device that transparently stitches the L2 frames between an Ethernet port or a VLAN and an L2TP session.

L2TP LNS, on the other hand, terminates L2 services and places the L2TP session into a forwarding domain (such as an L2 bridge domain or an L3 routing instance). LNS makes forwarding decisions based on forwarding information base (FIB) lookups.

L2TP operates in three tunneling reference models:

• LAC-to-LAC
• LAC-to-LNS
• LNS-to-LNS