The present invention provides a way of placing a physical layer device into a standby mode. After a link is established between multiple devices, a determination is made whether the device has data to transmit or whether a standby request was received from a link partner. If a standby request was received or the device has no data to transmit, standby mode is entered. In standby mode, unneeded circuitry is powered down. A transmitter in a channel and a receive path in a separate channel remain powered. While operating in standby mode, the PHY layer continuously transmits a standby code on the one or more channels that are not powered down. Standby mode is discontinued when a transceiver has data to transmit or when energy is detected on the powered down channels. Standby mode is also discontinued when no standby code is received, indicating a disconnect between devices.