A method and protocol for dynamic upstream bandwidth allocation to prevent congestion in an aggregation system consisting of multiple PON OLT devices that share a common Service Network Interface (SNI). The method allows OLT devices to communicate real time user traffic load information, and for each OLT to self-throttle upstream throughput based on overall system view of traffic load. The method allows the available SNI bandwidth to be dynamically allocated to OLT ports while maintaining fairness per ONT (user). The method is implemented as a peer-to-peer protocol and does not require central controller resources. The method can be implemented in existing PON systems using software. The method saves the need for expensive dedicated traffic manager devices on the OLT aggregation point.