PPP permits multiple network layer protocols to operate on the same communication link. For every network layer protocol used, a separate Network Control Protocol (NCP) is provided in order to encapsulate and negotiate options for the multiple network layer protocols. It negotiates network-layer information, e.g. network address or compression options, after the connection has been established.
For example, Internet Protocol (IP) uses the IP Control Protocol (IPCP), and Internetwork Packet Exchange (IPX) uses the Novell IPX Control Protocol (IPX/SPX). NCPs include fields containing standardized codes to indicate the network layer protocol type that the PPP connection encapsulates.