The carrier-of-carriers model is designed around a hierarchical service provider model which allows a smaller carrier or customer to peer with a larger carrier and extend its transport domain across the larger carriers network. The main carrier uses its PE nodes to connect to the customer carriers CE sites and import their loopback addresses into a specific VRF used for the customer carriers control plane across the larger carriers network.
The CE routers peer to the PE routers using MP-eBGP with labeled-unicast. The CE routers advertise internal address space towards the PEs as labeled VPNv4 packets. These routes are carried over the main carriers core to the PE that’s connect to the customers remote second site. The routes are then advertised over a second MP-eBGP session to the customers second CE which advertises the routes further downstream into the internal network.
This end to end path allows the two remote sites to establish a multihop iBGP session as internal routes have been propagated end to end over the carrier-of-carriers transport.