How do IP multicast tunnels work?

IP multicast packets are encapsulated for transmission through tunnels, so that they look like normal unicast datagrams to intervening routers and subnets. A multicast router that wants to send a multicast packet across a tunnel will prepend another IP header, set the destination address in the new header to be the unicast address of the multicast router at the other end of the tunnel, and set the IP protocol field in the new header to be 4 (which means the next protocol is IP). The multicast router at the other end of the tunnel receives the packet, strips off the encapsulating IP header, and forwards the packet as appropriate.

Previous versions of the IP multicast software (before March 1993) used a different method of encapsulation based on an IP Loose Source and Record Route option. This method remains an option in the new software for backward compatibility with nodes that have not been upgraded. In this mode, the multicast router modifies the packet by appending an IP LSRR option to the packet's IP header. The multicast destination address is moved into the source route, and the unicast address of the router at the far end of the tunnel is placed in the IP Destination Address field. The presence of IP options, including LSRR, may cause modern router hardware to divert the tunnel packets through a slower software processing path, causing poor performance. Therefore, use of the new software and the IP encapsulation method is strongly encouraged.

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