A pluggable transceiver, and its use, looping back Layer 2 and higher data in an Ethernet network element. The transceiver has upstream and downstream datapaths, a logic array having first and second complimentary latching loopback logic blocks (LLBLBs) connected in series through both datapaths. The first LLBLB receiving an upstream datapath frame, comparing it to loopback conditions and looping back the frame on the downstream datapath if the conditions match. If the conditions did not match, the frame is sent to the other LLBLB. The first LLBLB receiving a frame from the second LLB and transmitting it on the upstream datapath with priority over any loop back frames to maintain the upstream throughput requirements of the pluggable transceiver. The second LLBLB operates in mirror image with respect to the datapaths.