Progress towards the definition of next-generation passive optical networks (PONs) based on wavelength-division multiplexing (WDM) is reviewed and compared to emerging requirements. A key challenge is providing ultra-high (e.g. 10 Gbps) bandwidth for demanding users while cost-effectively supporting less-demanding users. A new approach is presented in which diverse bandwidth requirements are supported on a conventional WDM PON outside plant through the use of flexible wavelength sharing in the local office. An example is demonstrated experimentally showing that with 16 users per passive node, each wavelength can be shared by up to 16 users distributed across up to 16 PONs served by the same local office. Factors limiting sharing and throughput are discussed.