A method and Provider Backbone Bridge (PBB) for handling customer multicast frames that are received by a Customer Network Port or Provider Network Port on an I-component of the PBB. Customer multicast frames that are forwarded to a Virtual Instance Port (VIP) on the I-component are encapsulated with a Backbone Destination Address (B-DA) equal to the original Customer Destination Address (C-DA) of the received customer multicast frames instead of the Default B-DA. This capability may be controlled by an “EnableCustomerMulticast” parameter enabling the above behavior to be independently set for each VIP on the I-component.