TN, and data traffic is combined and sent on one shared ATM trunk, with each customer assigned a separate ATM virtual circuit. Along with support for plain old telephone service (POTS), ISDN, and DSL interfaces, new interfaces are also being added to support a wider range of services. These include 10Mbps and 100Mbps Ethernet in support of emerging metro area Ethernet services, PON headends in support of PON service, and OADMs that sup- port the provisioning of wavelength services. Ultimately, the biggest issue facing the deployment of next-generation digital loop carriers is regulation. Regulation adds a level of complexity due to disputes over which portions of the local loop the incumbent local exchange carriers (ILECs) are required to wholesale to their competitors. A PON is basically a fiber-to-the-premises (FTTP) arrangement in which a single optical fiber serves multiple (up to 32) premises. It is, in essence, a point-to- multipoint configuration that reduces the amount of fiber required. Taking advan- tage of WDM, PONs allow for two-way traffic on a single fiber pair by making use of one wavelength for downstream traffic and another for upstream traffic. PONs work by using passive (i.e., unpowered) optical splitters to split the power of the optical signal and route it to multiple subscribers. (Figure 12.8 in Chapter 12, "Broadband Access Alternatives," shows an example of a PON.) A PON shares one fiber channel among up to 32 customers to deliver voice, data, and potentially video. PONs reduce costs by distributing costs across more endpoints and replacing expensive ADMs or DWDM nodes with optical splitters and couplers at each fiber connection in the network. Downstream signals, broad- cast to each premise by using a shared fiber, are encrypted to prevent leavesdrop- ping. Upstream bandwidth is allocated by assigning a time slot to each subscriber when the user has traffic to send. PONs have started to be of more interest to local telcos because they signifi- cantly reduce the cost of provisioning fiber 