PPPoE (Point-to-Point Protocol over Ethernet) relies on Ethernet broadcast and discovery mechanisms. It uses a discovery stage (PPPoE Active Discovery Initiation - PADI) which is sent as a broadcast. Therefore, PPPoE only works within the same Layer 2 broadcast domain.
If a router (Layer 3 device) exists between the client and PPPoE server, it breaks the Layer 2 broadcast domain, making it impossible for the client to reach the server.
* A.#False - Routers break the broadcast domain; PPPoE will fail.
* B.#True - PPPoE requires L2 adjacency.
Extract from Official MTCNA Course Material - PPPoE Concepts:
"PPPoE operates only over Ethernet broadcast domains. If routed, PADI packets will not reach the PPPoE server." Extract from Rene Meneses MTCNA Study Guide - PPPoE:
"PPPoE discovery is broadcast-based and does not traverse routers."
Extract from MikroTik Wiki - PPPoE Limitations:
"PPPoE cannot function over routed networks. Server and client must be in the same broadcast domain."