What are the challenges?
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Interoperability: legacy (hub/router) networks have to coexist with switched networks
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Switching capabilities must be implemented at both layer 2 and layer 3 of the OSI model (multilayer switching)
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LAN emulation must become commonplace - it isn't now
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Or, network layer protocols must be modified to operate directly over ATM in native (AAL) mode (RFC 1577). This, BTW, would make ATM native QoS guarantees available for higher level protocols
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