This process packages the original data, keeping its format, and adds labels or headers that tell the network where to send the packets.
In simple terms, a pseudowire is like a virtual tunnel that tricks two points in the network into thinking they’re connected by a direct wire, even though they’re actually communicating over a more complex infrastructure.
[1] In 2001, the Internet Engineering Task Force (IETF) set up the PWE3 working group, which was chartered to develop an architecture for service provider edge-to-edge pseudowires, and service-specific documents detailing the encapsulation techniques.
Starting from 2006, telecom operators like BellSouth, Supercomm, AT&T, and Verizon began to invest more into pseudowire technology, pointing out its advantages to Ethernet in particular.
[2] Pseudowires tie services together across multiple transport technologies, including Ethernet over SONET, WDM, GPON, DSL, and WiMax.