Ethernet Address Internal Structure
The second-to-lowest-order bit of a physical Ethernet address indicates whether that address is believed to be globally unique or if it is only locally unique; this is known as the Universal/Local bit. For real Ethernet physical addresses, the multicast and universal/local bits of the first byte should both be 0.
When (global) Ethernet IDs are assigned to physical Ethernet cards by the manufacturer, the first three bytes serve to indicate the manufacturer. They are allocated by the IEEE, and are officially known as organizationally unique identifiers. These can be looked up at any of several sites on the Internet to identify the manufacturer associated with any given Ethernet address; the official IEEE site is standards.ieee.org/develop/regauth/oui/public.html (OUIs must be entered here without colons).
As long as the manufacturer involved is diligent in assigning the second three bytes, every manufacturer provided Ethernet address should be globally unique. Lapses, however, are not unheard of.
Ethernet addresses for virtual machines must be distinct from the Ethernet address of the host system, and may be (eg with so-called “bridged” configurations) as visible on the LAN as that host system’s address. The first three bytes of virtual Ethernet addresses are often taken from the OUI assigned to the manufacturer whose card is being emulated; the last three bytes are then either set randomly or via configuration. In principle, the universal/local bit should be 1, as the address is only locally unique, but this is often ignored. It is entirely possible for virtual Ethernet addresses to be assigned so as to have some local meaning, though this appears not to be common.
The LAN Layer
The LAN layer, at its upper end, supplies to the network layer a mechanism for addressing a packet and sending it from one station to another. At its lower end, it handles interactions with the physical layer. The LAN layer covers packet addressing, delivery and receipt, forwarding, error detection, collision detection and collision-related retransmission attempts.
In IEEE protocols, the LAN layer is divided into the media access control, or MAC, sublayer and a higher logical link control, or LLC, sublayer for higher-level flow-control functions that today have moved largely to the transport layer. For example, the HDLC protocol (4.1.5.1 HDLC) supports sliding windows (6.2 Sliding Windows) as an option, as did the early X.25 protocol. ATM, 3.5 Asynchronous Transfer Mode: ATM, also supports some higher-level functions, though not sliding windows.
Because the LLC layer is so often insignificant, and because the most well-known LAN-layer functions are in fact part of the MAC sublayer, it is common to identify the LAN layer with its MAC sublayer, especially for IEEE protocols where the MAC layer has official standing. In particular, LAN-layer addresses are perhaps most often called MAC addresses.
Generally speaking, much of the operation of the LAN/MAC layer takes place in the network card. Host systems (including drivers) are, for example, generally oblivious to collisions (although they may query the card for collision statistics). In some cases, eg with Wi-Fi rate scaling (3.7.2 Dynamic Rate Scaling), the host-system driver may get involved.