In order to keep pace with increasing Internet traffic, network operators have widely deployed optical fibers and optical transmission equipment, substantially increasing the capacity of backbone networks.  A corresponding increase in access network capacity is also needed to meet the increasing bandwidth demand of end users for triple play services, including Internet protocol (IP) video, high-speed data, and packet voice.  Even with broadband solutions, such as digital subscriber line (DSL) and cable modem (CM), the limited bandwidth offered by current access networks still presents a severe bottleneck in delivering large bandwidth to end users.  Among different competing technologies, passive optical networks (PONs) are one of the best candidates for next-generation access networks.  With the large bandwidth of optical fibers, PONs can accommodate broadband voice, data, and video traffic simultaneously.  Furthermore, PONs can be built with existing protocols, such as Ethernet and ATM, which facilitate interoperability between PONs and other network equipment. 
As the demand from users for bandwidth is rapidly increasing, optical transmission systems, where subscriber traffic is transmitted using optical networks, is installed to serve this demand.  These networks are typically referred to as fiber-to the-curb (FTTC), fiber-to-the building (FTTB), fiber-to-the premise (FTTP), or fiber-to-the-home (FTTH).  Each such network provides access from a central office (CO) to a building, or a home, via optical fibers installed near or up to the subscribers' locations.  As the transmission bandwidth of such an optical cable is much greater than the bandwidth actually required by each subscriber, a Passive Optical Network (PON), shared between a plurality of subscribers through a splitter, was developed. 
Typically, PONs are used in the “first mile” of the network, which provides connectivity between the service provider's central offices and the premises of the customers.  The “first mile” is generally a logical point-to-multipoint network, where a central office serves a number of customers.  For example, a PON can adopt a tree topology, wherein one trunk fiber couples the central office to a passive optical splitter/combiner.  Through a number of branch fibers, the passive optical splitter/combiner divides and distributes downstream optical signals to customers and combines upstream optical signals from customers.  Note that other topologies are also possible, including ring and mesh topologies.  Transmissions within a PON are typically performed between an optical line terminal (OLT) and optical network units (ONUs).  The OLT controls channel connection, management, and maintenance, and generally resides in the central office.  The OLT provides an interface between the PON and a metro backbone, which can be an external network belonging to, for example, an Internet service provider (ISP) or a local exchange carrier.  The ONU terminates the PON and presents the native service interfaces to the end users, and can reside in the customer premise and couples to the customer's network through a customer-premises equipment (CPE). 
As used herein, the term “downstream” refers to the transfer of information in a direction from an OLT to an ONU.  The term “upstream” refers to the transfer of information in a direction from an ONU to an OLT.  During the transfer of data within a PON, data packets are queued in memory.  In general, data packets are managed in an internal memory of the OLT.  The OLT is responsible for the transmission of data packets both upstream and downstream.  Due to the volume of data packets in such systems, an external memory is used in a management scheme to store packet descriptors associated with the data packets.  Such a management scheme is often affected by the latency involved in reading and writing data to the external memory.  Such latency can result in the dropping of packets when a transmission time is missed due to a delay.  Therefore, a management scheme is needed within a PON, that avoids such problems.