Ethernet Passive Optical Network (EPON) has drawn considerable research attention in recent years. EPON can be implemented in different topologies in access network environment. Recently, the tree topology was the focus of the researchers. In this paper, we propose a cost effective novel ringbased EPON architecture with associated dynamic bandwidth allocation (DBA) algorithm as an alternative to standard EPON architectures. This architecture, compared with conventional ring, allows optical line terminal (OLT) receiver to function with narrower dynamic range through minimization of near-far problem. In addition, the proposed DBA algorithm outperforms other DBA algorithms proposed in the literature. This proposed architecture is proved to be fault-tolerant and cost effective. Furthermore, this novel approach also has the potential of interoptical network units (ONU) connectivity, which can bring LAN support in access environment.