One embodiment provides a system for controlling flow rate in an EPON. The system includes an OLT, an ONUs coupled to the OLT via a passive optical splitter, a switch coupled to a port located on the ONU, and a flow-control mechanism. The ONU includes one or more queues corresponding to one or more classes of Services, and one or more ports. The switch includes a plurality of UNI ports, and the switch is configured to switch one or more upstream traffic flows belonging to the one or more classes of services from the plurality of UNI ports. The flow-control mechanism is configured to set a flow rate of an upstream traffic flow of certain class of service originated from a UNI port. The flow-control mechanism sets the flow rate based on status of an ONU queue corresponding to the class of service of the upstream traffic flow.