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  What is PPPoE?
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PPPoE simplifies and enhances the end-user experience by allowing the dynamic selection of service offerings or retail ISPs in wholesale networks, much as TV viewers select channels. With PPPoE, access control, billing and service type can be controlled per-user offering ISPs many new ways of increasing revenues and offering new services.
When a router receives the frame, it reads the control information provided by the CPE then it strips the control information from the frame. It passes the frame up to the next layer, following the instructions that appeared in the control portion of the frame. Each subsequent layer will perform this same de-encapsulation process. With PPPoE this needs to be done with the Ethernet header, the PPPoE header, and then the PPP header leaving the TCP/IP payload. This operation is then done in reverse when the frame comes from the provider through the termination device to the CPE. This CPU intensive and memory intensive process leaves many trouble areas in Next Generation and Legacy routers, as well as this function has to be done at wire speed to not impact time sensitive applications such as VoIP.
Figure 1 — Total PPPoE Frame size

Capacity Intense
Terminating PPPoE is a CPU/memory-intensive process. Terminating PPPoE on hardware intended for routing and optimized for this service therefore greatly reduces its routing capability. For example, a router capable of routing 96,000 sessions generally can terminate only 8000 PPPoE sessions under real-world conditions. This is only about 8% of the router's originally estimated capacity. Starting with zero customers, a network built out to reach capacity in five years without router-terminating PPPoE would reach capacity in approximately 4.8 months with the added overhead of PPPoE termination. The cost of buying more routing hardware to regain the lost capacity can be prohibitive.

Impact on Delivering New Services
As next-generation routers are introduced, new services and features, such as Voice over IP (VoIP), become easier to deliver — if router capacity is available to offer them. But a next-generation router operating at peak usage due to PPPoE termination does not have the resources available to offer next-generation services. This forces large capital investment to purchase a second router to regain the network capacity required for the new services and features.
Hardware Expense
With the small margins of profit per customer on broadband Internet connections, using expensive next-generation routers to terminate PPPoE dramatically increase the time necessary to recover the cost of installing an average customer. If a router could operate at maximum capacity this would not be an issue. But with a router handling only 8% of expected capacity; the cost per subscriber to route and terminate PPPoE can be as high as $15 per subscriber.

At a profit margin per customer of only $2 per month, achieving profit after other installation costs (modem, software, and so on) have been covered would take approximately 7.5 months.

The PPPoE server is a single point of failure in a network. If this one piece of equipment, which all customers must access to get online, fails, all customers can no longer access the Internet. This results in increased call center traffic and higher operating costs per customer. Multiple PPPoE servers capable of seamless loading balancing are the answer to this problem — but traditional and next-generation routers that include PPPoE functionality do not offer native load-balancing technology. Considering the high cost of next-generation routers, the unavailability of built-in load balancing limits the network engineer's options for creating a redundant network capable of 99.999% uptime.

As the previous section has shown, terminating PPPoE on existing router hardware is a costly approach to leveraging the value of PPPoE connectivity. This PPPoE termination problem can be simply and efficiently addressed by introducing to the network a unit designed specifically and only for PPPoE termination. Figure 4 illustrates this solution. The PPPoE termination unit in this case is the Fine Point Networks ServPoET BMS, shown connected between a PPPoE aggregation unit and the legacy (or next-generation) router.

Offloading PPPoE from either legacy routers or next-generation equipment affords multiple advantages to a service provider, including increased network capacity, faster return on investment, and lower per-subscriber cost.
Increased Network capacity
Offloading PPPoE termination from the router increases available network capacity by a factor of approximately 11. Now the router is no longer a bottleneck, and network resources are optimized for more efficient routing, bandwidth usage and value-added service delivery.

The router is freed to route the amount of prospective customers it was built out to handle, regaining its target threshold capacity. The full router capacity is now available for the introduction of value-added and next-generation services.
A Load-Balanced, Redundant Network
The low cost of units designed specifically to terminate PPPoE sessions makes for a much more cost-effective solution than using routers to terminate PPPoE. The money saved allows the purchase of multiple PPPoE termination units, allowing the service provider to build and support a redundant network for 99.999% uptime.

A unit specifically designed for PPPoE termination can be engineered to include native clustering technology. One such unit, the Fine Point Networks ServPoET BMS, can be clustered to enable automatic load balancing of PPPoE network traffic among clustered units for improved service levels. The ServPoET SmartCluster™ technology evenly distributes sessions among cluster members, automatically removing members that fail or become unreachable. New cluster members can be hot-added to expand an existing cluster for additional capacity and performance, allowing administrators to scale their services with unprecedented time and cost savings.
Return on Investment
With the small margins of profit per customer on Broadband Internet connections a cost effective solution can dramatically decrease the time necessary to recover the cost of installing a customer. Per-customer time to profitability is greatly reduced.

In many cases, the result is an elevenfold increase in the life of the network before heavy capital must be invested to expand or upgrade it. The life span of the router is also increased because it is not continually working at 90 to 100% CPU and memory capacity, increasing the time before the unit fails and must be taken offline for service.
Lower Per-Subscriber Cost
Using a unit specifically designed for terminating PPPoE can reduce cost per subscriber to as little as $2. Installing a PPPoE termination unit is a one-time cost, so the cost to terminate each subscriber decreases as the unit’s in-service time increases.

Assuming a service provider per-customer profit margin of only $2 per month, it would take approximately 7.5 months to gain profit per customer after the cost of other installation aspects (modem, software, and so on—approximately $15 per subscriber) are covered. With this new model, profits begin immediately after installation costs have been covered — typically, beginning with the second month of service. Figure 6 compares the two PPPoE termination options.

Offloading PPPoE from a legacy or next-generation router to dedicated PPPoE termination hardware allows a service provider to free valuable network resources and expand the network without high capital investment. Especially when load-balancing-capable PPPoE termination hardware is used, offloading PPPoE can reduce time to profitability per customer and speed the delivery of value-added and next-generation Internet services.