A network setup called PPPoE is used to create a PPP link using the Ethernet protocol. Broadband Internet links are frequently made using it. A normal dial-up PPP link cannot be used because DSL routers usually communicate to PCs via an Ethernet connection. As a result, PPP over Ethernet enables computer connections to Internet service providers (ISPs) using DSL modems.

The Network Control Panel (Windows) or the Network System Preferences contain a PPPoE network setup choice (Mac OS X). You will need to input the service name supplied by the Provider as well as a login and password in order to establish a PPPoE link. This gives the Provider a quick and easy method to recognize your machine and set up your Internet link. PPPoE can be compared to DHCP, which is frequently employed by cable Internet service companies and automatically gives distinctive IP numbers to linked systems.

The simplicity of setting up a PPPoE setup is its main benefit. It also allows a local area network with numerous devices (LAN). PPPoE has the drawback that more data must be sent over the Internet link as added latency. Each message delivered over a normal PPPoE link gains an additional 8 bytes of data. Even though only a tiny percentage of packets with an MTU of 1500 bytes use this size, some networks only use packets of 60 bytes or less, so PPPoE adds over 13% latency. Because of this, many Broadband companies now also provide DHCP setups.