What is PPPoE & How is it Used by DSL ISPs?

Internet Basics: What is PPPoE?

PPPoE stands for Point-to-Point Protocol over Ethernet, a network protocol for encapsulating Point-to-Point Protocol (PPP) frames inside Ethernet frames. It is used mainly with DSL services where individual users connect to a DSL modem over Ethernet. Ethernet networks are packet-based and have no capacity for a connection or circuit. They also lack basic security features to protect against IP and MAC conflicts and rogue DHCP servers.

With PPPoE, users virtually “dial” from one machine to another over an Ethernet network, establish a point-to-point connection and then data packets are securely transported through the connection.

A Visual Explanation of How PPPoE works


PPPoE is primarily used by telephone companies. The protocol allows for the easy separation of digital subscriber line access multiplexers (DSLAM) where it is required by regulators.

PPPoE also allows ISPs to create pre-paid traffic business models (usually through DSL subscriptions), either by allowing them to offer different speed tiers or QoS (Quality of Service) bandwidth controls through a single DSL modem, or by creating a different login for each static IP purchased by a customer. (Explanation Adapted from Wikipedia)

Basically, PPPoE offers an Internet service provider (ISP) an easier way to track exactly how much bandwidth you are using in case they want to charge for it in the future.

HOWEVER, when you use a VPN with PPPoE, you are able to prevent an ISP from monitoring your DSL connection since ISPs commonly use deep packet inspection to analyze your Internet traffic and limit your bandwidth.

By encrypting your data, VPN service providers such as HideMyAss and IPVanish, can help stop your ISP from inspecting the data you are receiving and limiting your Internet access.

How to Fix VPN Problems with PPPoE & DSL

Since both PPTP and PPPoE are tunneling protocols, most standard routers can not run them simultaneously. Using a DD-WRT router alongside your DSL modem/router allows unique configuration opportunities for simultaneous PPPoE Internet/WAN connections while running a PPTP orOpenVPN client connection.

This means that VPN service used with a DSL modem/router will no longer be limited to one device in your home but can be spread to any device (iPad, Roku, AppleTV) on your network simply by connecting wirelessly to the FlashRouter.

Some solutions involve quick-to-install integrated easy-to-use MyPage add-ons for DD-WRT such as for Overplay. Other provider setups are a bit trickier. For more detailed information on how to use PPPoE with specific VPN providers, check out our recent post on how to connect to PPPoE with VPN Service Provider.

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