LDP over RSVP-TE allows tunneling of user packets using an LDP LSP inside an RSVP LSP. The main application of this feature is for deployment of MPLS based services, for example, VPRN, VLL, and VPLS services, in large scale networks across multiple IGP areas without requiring full mesh of RSVP LSPs between PE routers.

What is the difference between LDP and RSVP-TE?

2 commonly used terms in MPLS are LDP and RSVP-TE. While the former relates to easy provisioning in MPLS setup, the latter i.e. RSVP-TE is related to guarantee bandwidth for traffic communication. LDP setups LSPs based on routing data, whereas RSVP setups additional traffic engineered LSPs.

What are two functions of LDP?

LDP is used to build and maintain LSP databases that are used to forward traffic through MPLS networks. LDP can be used to distribute the inner label (VC/VPN/service label) and outer label (path label) in MPLS. For inner label distribution, targeted LDP (tLDP) is used.