MPLS is a packet-forwarding technology, which uses labels to make data forwarding decisions. Label inspection drives subsequent packet forwarding. Devices that function as ingress (packet in) and/or egress (packet out) routers are often called PE (Provider Edge) routers. Devices that function only as transit routers are similarly called P (Provider) routers.

MPLS addresses both problems. In essence, it provides for ATM-like traffic engineering across an all-IP backbone, eliminating the cell tax and reducing the number of networks that must be managed - both net gains for service providers. Additionally, MPLS by design does not interfere with user address space. This means that, unlike in a "pure" routed IP network, users can maintain their addresses, even using private (net10) addresses. Again, this feature was and is available over a frame relay or ATM network; the difference in this case is that it's available across an IP one.

All that said, MPLS isn't a complete panacea. Ensuring the scalability and security of MPLS networks is something of a black art, requiring sophisticated network design. But overall, MPLS gives service providers increased control over their networks - and that can only translate to better service quality for users.