The assumption here is that LSRs (label switching routers) are connected directly so a label is used as an identifier of a VC. However campuses are connected by ATM P/SVCs and VPI/VCI on a link has local significance. So a label cannot be used as a VCI. A Label Distribution Protocol (LDP) is needed.
The proposal from SONY and CISCO is for a VC-ID: A Label has two roles:
According to the proposal a label will be used for an index and a VC-ID for an identifier. There is the case where LSRs are directly connected and the value of the label can be used as the value of the VC-ID, and when ther LSRs are not directly connected. Tere are different procedures for unicast and for multicast to determine the points where VC-ID allocation is being done.
With ATM SVC signalling is required which introduces delays up to 100s of msec and adds complexity to the LDP. The idea is to prepare a number of VCs in a pool. Pick a VC on a BIND like procedure. Put back on an UNBIND like procedure. Release some of the VCs if there are to many. Each VC corresponds to a VC-ID.