As customers deploy ADSL they must support PPP-style authentication and authorization over a large installed base of legacy bridging customer premises equipment (CPE). PPPoE provides the ability to connect a network of hosts over a simple bridging access device to a remote access concentrator or aggregation concentrator. With this model, each host uses its own PPP stack, thus presenting the user with a familiar user interface. Access control, billing, and type of service can be done on a per user, rather than a per site, basis.

As specified in RFC 2516, PPPoE has two distinct stages: a discovery stage and a PPP session stage. When a host initiates a PPPoE session, it must first perform discovery to identify which server can meet the client's request, then identify the Ethernet MAC address of the peer and establish a PPPoE session id. While PPP defines a peer-to-peer relationship, discovery is inherently a client-server relationship.