As service providers move more applications to their IP/MPLS (Multiple Protocol Label Switching) networks, rapid restoration upon failure becomes more and more crucial. Recently MPLS fast reroute has attracted lots of attention as it was designed to meet the needs of real-time applications, such as voice over IP. MPLS fast reroute achieves rapid restoration by computing and signaling backup label switched paths (LSP) in advance and re-directing traffic as close to failure point as possible. To provide a guarantee of failure restoration, extra bandwidth has to be reserved on backup LSPs. To improve the bandwidth utilization, path-merging technique was proposed to allow bandwidth sharing on common links among a service LSP and its backup LSPs. However, the sharing is very limited. In this paper, we provide efficient distributed solution, which would allow much broader bandwidth sharing among any backup LSPs from different service LSPs. We also propose an efficient algorithm for backup path selection to further increase the bandwidth sharing. The associated signaling extension for additional information distribution and collection is provided. To evaluate our solution, we compare its performance with the MPLS fast reroute proposal in IETF via simulation. The key figure-of-merit for restoration capacity efficiency is restoration overbuild, i.e., the ratio of restoration capacity to service capacity. Our simulation results show that our distributed solution reduces restoration overbuild from 2.5 to 1, and our optimized backup path selection further reduces restoration overbuild to about 0.5.