How do two BGP peers signal their capabilities to each other?

Two BGP peers signal their capabilities to each other through the exchange of OPEN messages. During the establishment of a BGP session, each peer sends an OPEN message, which includes a field specifically designed to communicate the capabilities they support. This field allows peers to negotiate features such as support for different address families, route refresh, and other protocol extensions.

The exchange of capabilities in the OPEN message is essential for ensuring that both peers are aware of the features available to each other, which can enhance the functionality of the BGP session and improve routing performance. Capabilities that are announced in this manner help in determining what features can be utilized during their communication.

The other choices do not accurately describe the process. For instance, UPDATE messages are used to exchange route information and do not include capability details. Sending CAPABILITIES messages before OPEN messages is not defined in the BGP specification, as capability negotiation occurs during the OPEN message exchange. Manual configuration by network operators does not pertain to how capabilities are communicated but rather to setting up and managing BGP sessions overall.