A novel method for fully utilizing the multicast or broadcast capability of a physical network is provided. The method identifies segments of the network within which broadcast traffic, multicast traffic, or traffic to unknown recipients (BUM traffic) is allowed or enabled. The identified segment encompasses parts of the network that the BUM traffic is able reach while excluding parts of the network nodes that the BUM traffic is unable to reach. Each identified segment includes network nodes that are interconnected by physical network hardware that supports BUM traffic. The method identifies multiple BUM traffic segments in a given network that each supports its own BUM traffic. The different BUM traffic segments are interconnected by physical network hardware that does not support BUM network traffic. Each identified segment is assigned an identifier that uniquely distinguishes the identified segment from other identified segments.