Can MPLS be used instead of L3 routing within small networks?
Ranji and Leo,
MPLS can not be used instead of L3 routing. MPLS itself depends on L3 routing to provide the key information for MPLS to operate upon. An MPLS-enabled router still needs a routing table:
to handle unlabeled packets
to assign labels to known networks
to know which neighbor's label assignments should be used for which destinations (next hops)
I do not see a way of having a network without L3 routing and with MPLS active. Granted, there are advanced topics in MPLS like MPLS Transport Profile that reduce routers to MPLS switches and leave the task of populating the LFIBs to a central control element, but these solutions are way out of the scope of the original question.
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