As utilities begin to weigh the advantages — and cost — of these applications, they are finding they must make some basic decisions first about the details of any new communications infrastructure, and more and more IP/multiprotocol label switching (MPLS) systems seem to be the preferred choice.

First off, an IP/MPLS network is simply a packet-switched network that uses the transmission control protection (TCP)/IP stack enhanced with the MPLS standard. A packet-switched network is a digital communications network that groups all transmitted data into usable blocks, or packets. The network over which these packets travel is a shared one that routes each packet independently from all others and allocates transmission resources as needed.

This is best illustrated by the seven-layer open system interconnection model (above), which defines a networking framework to implement communications protocols. Control is passed from one layer to the next, starting at the top (the application) layer and proceeding to the bottom (physical) layer. Levels 1 through 3 contain most of the hardware. This protocol architecture allows each layer to operate, more or less, independently, and higher-layer software and applications can function properly regardless of the physical network.

The MPLS standard, which was introduced to guarantee delivery and reduce network delay in the IP environment, is a bit different. It operates above the IPs (in an unofficial Layer 2.5) in the OSI model. It operates on packets (Layer 2) while working with IP addresses (Layer 3), using labels to route packets differently.