1

The term encapsulation generally signifies the below in terms of OSI model as described clearly here

"Each “function” (broadly speaking) encapsulates the layer(s) above it. The network layer encapsulates the layers above it. The data link layer encapsulates the network layer, and so on."

Q:But many a times, we also see that terms like mac in ip encapsulation (e.g OTV).In this case, the upper layer(Layer3) is encapsulating the lower layer(Layer2). Please explain why do we use the term encapsulation here. Is it not contradictory to what encapsulation generally means?

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Since you're quoting me, allow me to answer your question.

I don't think it's contradictory at all. While it's true that tunneling protocols* don't fit the OSI model, the process of encapsulation remains the same. The original protocol data unit (PDU) is contained within another PDU, such that the inner PDU's structure and semantics (meaning) can be ignored. The outer PDU is processed irrespective of what "data" it is carrying. In OTV, the outer PDU is IP, and that IP packet is processed like any other. The fact that it is carrying OTV data does not affect how the IP packet is processed as it travels through the network. That is the essential feature on encapsulation. It doesn't matter if the inner PDU is a "higher" or "lower" layer.

. * In addition to OTV, you can add all the other tunneling protocols, including TRILL, LISP, GRE, MPLS, IPSec, IPinIP, etc. None of them were anticipated by the ISO when they developed their model.

Now that I think about it, you could say that all tunneling protocols are an example of encapsulation.

2

The term encapsulation does not appear at all in the OSI/ITU-T's Reference Model. The term is used because it describes the function of the method being utilized, namely, encapsulating, or packaging, stuff to then send on.

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