• The TCP/IP protocol distinguishes between addresses that are local (ie. on the same broadcast domain) and remote (accessed via a router) by dividing the entire Internet wide area network into smaller subnetworks.
• Subnets of the backbone are large limbs, which contain smaller and smaller branches. The smallest branches contain "leaves". The leaves represent a single broadcast domain network containing stations.
• A TCP/IP subnet can either contain more subnets (i.e. a branch containing smaller twigs) or be a "leaf" subnetwork of its own. As in a real tree, a "leaf" subnetwork cannot contain "twigs". It contains only stations, such as personal computers, workstations or printers.
• The stations in the network must be able to communicate with each other at the MAC layer, and locate each other via broadcasting at the MAC layer. This causes the restriction that all stations within a given subnet must be members of the same broadcast domain.

The subnet mask is employed to determine if the destination IP address is that of either a local or a remote station in the following manner.

1. Both the destination and source IP addresses are logically ANDed with the subnet mask.
2. If the results of the operation are the same for both the destination and source IP addresses, then the source and destination stations must be connected to the same broadcast domain and the destination station is a local station, otherwise, the destination station is not connected to the same broadcast domain as the destination station and is a remote station.
3. If the destination station is determined to be a local station then the source station will determine the MAC address of the destination station and transmit the frame directly to the destination station via their common broadcast domain.
4. If the destination station is determined to be a remote station then the source station will determine the MAC address of the default router (by which remote stations can be reached) and transmit the frame to the default router which will forward it to the destination station via a routing network.

• The 5 golden rules for subnetting

1. IP addresses within a given subnetwork must be delimited within the boundary of the subnet mask.
2. All stations within a given subnetwork must share the same subnetwork mask.
3. All stations within a given subnetwork must be able to receive MAC layer broadcast frames from any device in the subnetwork.
4. If the source and destination addresses of two stations do not fall into the same subnetwork, communication between them can only occur via the default router.
5. Only a router can resolve addresses between different subnetworks.

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