A novel, low energy protocol for passive optical networks (PON), featuring bit-interleaving of downstream traffic, is described. The bit-interleaving protocol enables decimation of the received frame, which eliminates the processing overhead associated with unrelated traffic by customer premises equipment (CPE), while preserving the flexibility of downstream bandwidth allocation. Measurement results obtained from a bit-interleaving PON prototype at the line rate of 10 Gb/s indicate a reduction of CPE dynamic power consumption by a factor of 30, with respect to the power of a standard PON CPE at the same line rate. Additionally, a significant reduction in CPE hardware complexity, with respect to that of a standard PON CPE, is achieved.