What does a PE device do before forwarding packets to the customer?

A Provider Edge (PE) device is responsible for interfacing between the customer edge (CE) devices and the service provider's MPLS core network. Before forwarding packets to the customer, the PE device encapsulates the packets with an MPLS label, which is essential for efficient routing through the MPLS network.

Encapsulation with an MPLS label allows the PE device to classify and manage the outgoing traffic effectively. This process ensures that packets are efficiently routed through predetermined paths (Label Switched Paths or LSPs) within the MPLS network, providing benefits such as traffic engineering and improved bandwidth utilization. By adding an MPLS label, the PE device ensures that the packets can be easily identified and forwarded through the core network, ultimately reaching the correct destination.

The other options, while related to MPLS operations, do not accurately describe the main function performed by the PE device before forwarding packets to the customer.