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A router is a networking device that forwards data packets between computer networks. Routers perform the "traffic directing" functions on the Internet. The most familiar type of routers are home and small office cable or DSL routers that simply pass data, such as web pages, email, IM, and videos between computers and the Internet. More sophisticated routers, such as enterprise routers, connect large business or ISP networks up to the powerful core routers that forward data at high speed along the optical fiber lines of the Internet backbone. Though routers are typically dedicated hardware devices, use of software-based routers has grown increasingly common.
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Layer-2 means basically that the frames are being switched based on MAC addresses rather than IP addresses in the packets for layer-3 services.
The infrastructure over which these services run can rely on a broad range of technologies, either layer-2, layer-2.5 (MPLS) or pure layer-3 or sometimes SONET/SDH for unoversubscribed layer-2 services.
Depending on the services you're planning to use over the network, oversubscription and QoS requirements, you might prefer a carrier over the other depending on their backbone and service design.
Be mindful also that layer-3 services comes with more intelligent service portals from the carriers cause they have higher visibility into the network...
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