Layer 2 versus Layer 3 services: A Dummies Guide

Layer 2 versus Layer 3 services: A Dummies Guide

You can know plenty of technical detail about something, and yet still have no idea what it means in practice. We are all supposed to know that Layer 2 is the Data Link Layer, and Layer 3 is the Network layer - but when techies talk glibly about the choice between a Layer 2 or Layer 2 VPN, what does it actually mean?

We can even know that at Layer 2 customers share a common switching infrastructure and are assigned virtual circuits, while at Layer 3 they share internetworked routers – but still have no idea what this actually means in business terms.

So this article will attempt to give a rough idea, a taste, of what it means for a business to use Layer 2 or Layer 3 services – the benefits and drawbacks. To do so we begin with a simple analogy…

Layer 1 - the physical layer

Imagine people migrating into a virgin landscape – settlements springing up here and there. Then a big enterprise decides to make use of this growing labour pool and sets up business. How do they get the workers to their site? If they can get a railway company to arrange or build connections from each settlement to their HQ, the problem is solved.

This is how Wide Area Networks (WANs) began: an enterprise would ask a telco to provide a wire line from each of its branches to the HQ so the Local Area Networks (LANs) could be linked. Branches could also communicate with each other, by sending data via HQ.

This is a very simple, dead reliable solution – but it has drawbacks. It is inflexible, it takes time to provide each line and, when capacity is reached, each new line means significant capital expenditure.

Layer 2 - the data link layer

Meanwhile a road network is growing across the land, and it’s taking too long to lay railways as business booms. So, instead of long trains of commuters running down dedicated lines, they split the commuters into small groups and ask a bus company to provide the enterprise with dedicated routes between the settlements, branches and HQ. They can even stipulate the sort of service on those routes: non-stop commuter services from each settlement to HQ at rush hour, and slower stopping services elsewhere, and so on.

An Ethernet Layer 2 network is similar. It makes use of an existing Layer 1 network infrastructure (the road network). Long strings of data are split into small packets (bus-loads) and suitable private bus routes are defined (VLAN’s). Switches act like road junctions, and the traffic is directed down the right network, just as the bus driver knows what road to take to keep to the specified route. All passengers can line up at the bus stop and efficiently get to their destinations.

Layer 3 - the network layer

Layer 3 is more like a taxi network, where you know your final destination and the nearest taxi rank. At each street junction a decision is made on the best route to take towards the final destination. This is how the Internet works: you are sure to get there, but cannot guarantee the route.

In Layer 3 networks, all the complexity of routing is taken care of by the operator, but they cannot offer any real guarantee of quality. All “passengers” get equal treatment – whether in a hurry or however vital the journey.

An ideal solution

The best approach is to go for the “deterministic” benefits of a Level 2 system but with some enhancements. Instead of relying on public buses, we use dedicated bus companies and network of pre-determined routes. To get round traffic jams without resorting to taxis, we might ask for dedicated bus lanes, priority traffic lights and even flashing lights. If a passenger needed to arrive within a fixed time, they could get a priority pass to the superior service.

This is more like Vertel’s Level 2 carrier grade Ethernet network. The Metro Ethernet Forum (MEF) standard defines rules to allow voice, data and video to share a common network but with guaranteed jitter, latency and packet loss criteria. Levels of performance quality (QoS)) can be offered to suit different applications all running over the same infrastructure and even over the same circuit.

This has all the benefits of good coverage and flexibility to connect any points, while retaining the simplicity of not having all those routing decisions. In addition, with an added layer – let’s call it Layer 2.5 – we can define express bus lanes and alternative standby services to can get from A to B in the fastest possible time using known predefined routes. This is effectively what Vertel’s MPLS layer does – adding extra redundancy while maintaining Layer 2 simplicity.


While the industry oftens plugs the benefits of choosing Layer3 instead of Layer 2, Vertel has chosen the new MEF Layer 2 approach as the latest and simplest solution.

If you have a mix of voice, data and video applications linking multiple business locations, then Vertel’s Etherwave Line service will be configured to connect all the sites to your chosen data centre,delivering all the applications you need in a simple, scalable and reliable manner. Voice and video can be guaranteed low latency, LAN traffic can guarantee data transfers and the internet service can use all available bandwidth to run uncontended at maximum speed. We can even integrate legacy services such as ATM over the same network.

On a point of security: Vertel already has an extensive “private road network” across the nation, and can make use of other providers’ private networks too, so you don’t have to route your traffic through the public Internet.

Whatever your needs, you can now reduce your telecoms spend and boost capacity by using the fastest, most reliable network in the country. Contact Vertel to discuss your business needs and leave the heavy technical stuff to us!