BGP requires networks to use a fully meshed router configuration. This requirement does not scale well, especially when BGP is used as an IGP. One way to reduce the size of a fully meshed AS is to divide the AS into multiple sub-ASs and to group these sub-ASs into a routing confederation. Within the confederation, each sub-AS must be fully meshed. The confederation is advertised to other networks as a single AS.
Routing Confederation shows an example of a confederation.
In this example, AS 64500 has five BGP speakers. Without a confederation, BGP would require that the routes in AS 64500 be fully meshed. Using the confederation, AS 64500 is split into two sub-ASs: AS 64505 and AS 64510. Each sub-AS is fully meshed, and IBGP is running among its members. EBGP is used between sub-AS 64505 and sub-AS 64510. Router B and router D are EBGP peers. EBGP is also used between the confederation and outside ASs.