An optical communication system comprises a network interface device (NID) having a media converter coupled to an optical fiber of a passive optical network (PON). The media converter converts optical signals from the PON into electrical signals for communication across at least one non-optical channel, such as a conductive or wireless connection, to customer premises equipment (CPE), such as a residential gateway or other customer premises (CP) device. Rather than implementing an optical media access control (optical MAC) layer in the NID, an optical MAC layer for handling PON protocols and management is implemented by the CPE, thereby effectively extending the customer end of the PON across at least one non-optical connection to the CPE. By implementing the optical MAC layer at the CPE, the complexity of the NID is reduced thereby lowering the cost of the NID. In one embodiment, in an effort to further reduce the complexity of the NID, the optical MAC layer is configured to control a laser-on state of an optical transmitter in the NID.