A data transmission protocol for use in an ATM-based point-to-multipoint passive optical network having a headend facility and a plurality of downstream network units, wherein downstream data is transmitted in serial data frames comprising one hundred eighty, fifty-four byte downstream slots, including two framing slots and one hundred seventy-eight ATM cell slots, which are transmitted every 125 .mu.sec for an overall downstream bit rate of 622.08 Mbps. Upstream data transmission is provided on a 'permit' basis controlled by the headend based on monitoring ATM cell queue sizes at respective network units, wherein each downstream frame slot includes a one byte MAC overhead header field for transmitting upstream transmission permits allocated over twenty bit permit fields, for a total of seventy-two upstream permits allocated per downstream frame. Upstream data is transmitted from an individual network units in five hundred forty bit upstream data slots, each upstream slot having a preamble portion and a payload portion,--i.e., with seventy-two upstream slots are transmitted every 125 .mu.sec, thereby forming upstream frames received at the headend at a data rate of 311.04 Mbps. Upstream bandwidth permits are based on a selected set of service priorities, wherein the respective permits specify which ATM service type is to be transmitted.
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