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What is PPPoE?

The Point-to-Point Protocol over Ethernet (or PPPoE) enhances the PPP connection and allows multiple users to use it. Let’s have a look at it in more detail.

What is PPPoE?

What is PPP?

To better understand PPPoE, we must also clarify what PPP is. PPP is the communication protocol between two routers without any networking in between. It provides authentication, transmission, and data compression. It’s an old-school protocol that was popular in the ’80s and ’90s, mainly used for various types of physical networks. PPoE is an advanced version of PPP that enables PPP functionality to work for multiple users simultaneously.

What is PPPoE?

PPPoE definition

PPPoE is a network protocol that encapsulates Point-to-Point Protocol (PPP) within the Ethernet link-layer protocol. PPPoE combines the security features of PPP and Ethernet, which supports multiple users on a LAN. PPPoE manages the data traveling over the cable networks. It also allows a single server connection to be divided between multiple clients. As a result, multiple clients can connect to the same server and access the internet simultaneously, unlike PPP, which allows only one-on-one connections. When PPPoE was first implemented, ISPs could start offering internet connection to more people.

How does PPPoE work?

Imagine a telephone conversation between several people. Communicating would be difficult if some of them used the same earpiece for talking and listening. It would be more convenient if each person had their own device to listen and speak into.

PPPoE provides internet users with their own “earpieces.” PPPoE allows more client devices to be used on a server, so getting back to the comparison, each participant can now have a separate earpiece and communicate more efficiently. PPPoE enables one-to-many connections (unlike PPP, which allows only one-on-one connections). Due to this fact ISPs can now offer internet connection to more people.

Internet service providers usually provide their customers with routers that already have PPPoE configuration. They also assign you a unique username and password.

PPPoE operates in two phases:

  • The Discovery Phase. In this phase, the PPPoE client discovers the local Ethernet MAC address and establishes a session ID. Then users can choose a PPPoE server to use.
  • The Session Phase. When the discovery phase is completed and a connection between a host and a server is established, PPPoE starts to transfer data. A user then gets connected to the internet, and PPP protects that connection.

Why do we use PPPoE?

Here are some PPPoE use cases:

  • ISPs use PPPoE to deliver internet service to customers over broadband connections. Providers can connect several hosts on a single Ethernet LAN to a remote site via DCL cable or modem.
  • Individual users can also use PPPoE to protect their network. However, it is an outdated protocol that is no longer widely used.


PPPoE is outdated technology and, at the moment, is increasingly being replaced by DHCP or (Dynamic Host Configuration Protocol). DHCP allows admins to automate the assignment of IP addresses. It is more centralized because it enables the monitoring and distribution of addresses from central points. Without DHCP, network administrators would have to configure IP addresses manually.

PPPoE needs to be configured beforehand. Contrary to DHCP, it encapsulates the network based on credential access, while DHCP doesn’t require authentication to assign you a random IP.

To sum up, PPPoE and DHCP do different things — the former enables PPP communications on Ethernet, while the latter allocates IP addresses without authentication.