Embodiments allow for EPON MAC traffic to be sub-rated according to available bandwidth and/or transmission capacity of the physical medium. EPON MAC traffic sub-rating is performed in the PHY layer. The PHY layer performing the sub-rating may be located anywhere in the communication path supporting the end-to-end EPON MAC link. Because the sub-rating is performed in the PHY layer, the EPON MAC layer at either end of the EPON MAC link is unaware of the sub-rating being performed, and thus continues to operate as it would normally according to the IEEE standard that it implements.