How does MPLS differ from frame relay?

When using frame relay, you configure Layer 2 on your router, ending up with a WAN network with a connection to a central cloud.

Through that cloud, you have connections (permanent virtual circuits or PVCs) to whichever remote sites youve requested and are paying for. If you have a fully meshed network (where every site has a connection to every other site), you pay for every one of those PVCs, which can easily become quite expensive.

One of the biggest benefits offered by MPLS is that you dont have to worry about PVCs—nor do you have to pay for them. The pricing structure of a MPLS circuit is similar to an Internet circuit; you just pay for the access loop as well as a connection fee. Once connected, you have a fully meshed IP network between all remote sites. Keep in mind that MPLS circuits are not Internet circuits. While these circuits usually ride the same backbone as the carriers Internet traffic, they arent public circuits, and they have a private IP address structure. In addition, its important to remember that different carriers use MPLS in different ways.

Another huge benefit of MPLS is that you get to use the full port speed of your circuits. So, there are no more committed
information rates (CIRs) and no more forward explicit congestion notifications (FECNs) or backward explicit congestion notification (BECNs). Just like Internet service, if you buy a 1024-K Internet circuit, you get to use 1024 K of bandwidth, both ingress and egress.