The Multiprotocol Label Switching (MPLS) Architecture [1] discusses a way in which Asynchronous Transfer Mode (ATM) switches may be used as Label Switching Routers. The ATM switches run network layer routing algorithms (such as Open Shortest Path First (OSPF)@ Intermediate System to Intermediate System (IS-IS)@ etc.)@ and their data forwarding is based on the results of these routing algorithms. No ATM-specific routing or addressing is needed. ATM switches used in this way are known as ATM-LSRs (Label Switching Routers). This document extends and clarifies the relevant portions of [1] and [2] by specifying in more detail the procedures which to be used when distributing labels to or from ATM-LSRs@ when those labels represent Forwarding Equivalence Classes (FECs@ see [1]) for which the routes are determined on a hop-by-hop basis by network layer routing algorithms. This document also specifies the MPLS encapsulation to be used when sending labeled packets to or from ATM-LSRs@ and in that respect is a companion document to [3].