Cisco NCS 5500 Series Configuration Manual page 20

Implementing MPLS Label Distribution Protocol
Setting Up Label Switched Paths
The following figure illustrates the process of label binding exchange for setting up LSPs.
Figure 1: Setting Up Label Switched Paths
For a given network (10.0.0.0), hop-by-hop LSPs are set up between each of the adjacent routers (or, nodes)
and each node allocates a local label and passes it to its neighbor as a binding:
1 R4 allocates local label L4 for prefix 10.0.0.0 and advertises it to its neighbors (R3).
2 R3 allocates local label L3 for prefix 10.0.0.0 and advertises it to its neighbors (R1, R2, R4).
3 R1 allocates local label L1 for prefix 10.0.0.0 and advertises it to its neighbors (R2, R3).
4 R2 allocates local label L2 for prefix 10.0.0.0 and advertises it to its neighbors (R1, R3).
5 R1's label information base (LIB) keeps local and remote labels bindings from its neighbors.
6 R2's LIB keeps local and remote labels bindings from its neighbors.
7 R3's LIB keeps local and remote labels bindings from its neighbors.
8 R4's LIB keeps local and remote labels bindings from its neighbors.
MPLS Configuration Guide for Cisco NCS 5500 Series Routers, IOS XR Release 6.2.x
12