The statement is incorrect because it mischaracterizes Generic Routing Encapsulation (GRE) as a Layer 2 technology. GRE is a network layer (Layer 3) tunneling protocol. Its primary function is to encapsulate a wide variety of network layer protocol packets inside IP tunnels, creating a virtual point-to-point link over an IP network. While GRE can be used to transport Layer 2 frames (such as in a GRE over IPsec VPN to bridge two LANs), its fundamental design and classification place it at Layer 3 of the OSI model. True Layer 2 VPN technologies include protocols like Layer 2 Tunneling Protocol (L2TP) or Virtual Private LAN Service (VPLS).

The option "True" is incorrect because the core premise of the statement—that GRE is a Layer 2 VPN technology—is fundamentally false. GRE operates at the network layer (Layer 3) by encapsulating Layer 3 packets (the payload) into new IP packets (the delivery protocol). This is explicitly stated in its defining standards and official vendor documentation.

1. Official Vendor Documentation (Huawei): In the HCIP-Datacom-Core Technology V1.0 Training Material

GRE is explicitly defined as a Layer 3 VPN tunneling technology. The material states

"GRE is a Layer 3 VPN tunneling technology that provides a mechanism for encapsulating packets of one protocol into packets of another protocol... GRE encapsulates various protocol packets

such as IPX and AppleTalk packets

and transmits them over an IP network." This directly classifies GRE at Layer 3

contradicting the question's premise.

Source: Huawei

HCIP-Datacom-Core Technology V1.0 Training Material

Section: "GRE Principles".

2. Peer-reviewed Academic Publications (IETF RFC): The Internet Engineering Task Force (IETF) defines the GRE protocol. The standard clearly describes it as a mechanism for encapsulating network layer protocols.

Source: Farinacci

D.

et al. "Generic Routing Encapsulation (GRE)." RFC 2784

March 2000. The abstract states: "This document specifies a protocol for encapsulation of an arbitrary network layer protocol over another arbitrary network layer protocol." This confirms its operation at the network layer (Layer 3)

not the data link layer (Layer 2).

DOI: https://doi.org/10.17487/RFC2784

3. Official Vendor Documentation (Huawei): Huawei's product documentation for its enterprise and carrier routers consistently describes GRE as a Layer 3 feature. For example

in the configuration guides for NetEngine routers

GRE is detailed as a generic tunneling protocol used to transmit network layer packets.

Source: Huawei

NetEngine 8000 M8 & M14 V800R021C10 Configuration Guide - VPN

Section: "Understanding GRE". The guide explains

"Generic Routing Encapsulation (GRE) is a tunneling protocol that can encapsulate packets of a wide variety of network layer protocols inside IP tunnels." It is presented separately from L2VPN technologies.