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(PPPoE) The protocol defined in RFC 2516 that allows one or more computers to connect to the Internet via a shared modem. The computers connect to the modem via a local area network such as Ethernet and the modem connects to an Internet Service Provider (ISP) via a serial connection such as PPP over ADSL.
PPPoE provides each user with a connection that looks and behaves like a point-to-point dial-up connection even though they are actually sharing an Ethernet or wireless network. At the same time, the ISP only needs to provide a single Internet connection, with the same kind of accounting as for PPP. Also, the IP address is only assigned when the PPPoE connection is open, allowing the dynamic reuse of IP addresses via DHCP.
PPPoE works by encapsulating PPP frames in Ethernet frames.