BGP Label Update allows you to set up a Virtual Private Network (VPN) network so that the autonomous system boundary routers (ASBRs) exchange IPv4 routes with Multiprotocol Label Switching (MPLS) labels of the provider edge (PE) routers. In this scenario, Route reflectors (RRs) exchange VPNv4 routes and ASBR get relaxed to store those routes.
This results in improved scalability and simplifies the configuration. By using this feature, you can use non MPLS network as transit network, this helps you to transport all the IPv4 routes with labels over non MPLS network.
When you issue the neighbor send-label command under BGP configuration, the routers advertise to each other that they can then send MPLS labels with the routes. If the routers successfully negotiate their ability to send MPLS labels, the routers add MPLS labels to all outgoing BGP updates. This eliminates the need for using any label distribution protocol between the LSRs.(IS LDP Required For VPNv4 Labels)
In the above scenario, route reflector can reflect the IPv4 routes and MPLS labels learned from the ASBR to the PE routers in the VPN. This is accomplished by enabling the ASBR to exchange IPv4 routes and MPLS labels with the route reflector. The route reflector also reflects the VPNv4 routes to the PE routers in the VPN. ASBRs exchange IPv4 routes and MPLS labels for the PE routers by using EBGP.
MPLS labels are included in the update messages. Routers exchange the following types of BGP messages:
1. Open Messages
2. Update Messages
3. Keepalive Messages
4. Notification Messages
Out of four, Update Messages contains the Network Layer Reachability Information (NLRI), which has IP addresses of the usable routes. The update message also includes path attributes and the lengths of both the usable and unusable paths. Labels for VPNv4 routes are encoded in the update message as specified in RFC 2858. The labels for the IPv4 routes are encoded in the update message as specified in RFC 3107.