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Multicast services can be provided either as a basic network service or as an application-layer service. Higher level multicast implementations often provide more sophisticated features and can provide multicast services at places where no network layer support is available. Overlay multicast networks offer an intermediate option, potentially combining the flexibility and advanced features of application layer multicast with the greater efficiency of network layer multicast. In this paper, we introduce the multicast routing problem specific to the overlay network environment and the related capacity assignment problem for overlay network planning. Our main contributions are the design of several routing algorithms that optimize the end-to-end delay and the interface bandwidth usage at the multicast service nodes within the overlay network. The interface bandwidth is typically a key resource for an overlay network provider, and needs to be carefully managed in order to maximize the number of users that can be served. Through simulations, we evaluate the performance of these algorithms under various traffic conditions and on various network topologies. The results show that our approach is cost-effective and robust under traffic variations.