High Quality Content by WIKIPEDIA articles! Layer 2 Tunneling Protocol Version 3 is an IETF standard related to L2TP that can be used as an alternative protocol to Multiprotocol Label Switching (MPLS) for encapsulation of multiprotocol Layer 2 communications traffic over IP networks. Like L2TP, L2TPv3 provides a ‘pseudo-wire’ service, but scaled to fit carrier requirements.