Passive Optical Networks (PONs) are experiencing their first evolutionary steps in order to support higher capacity. As high-bandwidth applications and services continue to emerge, it is expected that capacity upgrades for existing PON infrastructure will occur in the near future. In this paper, we address the upgrading problem of existing PONs that need to increase their capacity, in an “as-needed” fashion and at different points in time. We propose and investigate the characteristics of a method that upgrades network line-rates and enables migration of network services towards new wavelength channels based on increasing traffic demands and cost constraints. Our method is intended to minimize capital expenses and system disruptions, while ensuring optimal resource usage. To do so, we have designed a multi-step model based on Mixed Integer Linear Programming (MILP) and pricing policies. We consider a typical case study for this problem, which is solved using CPLEX. Results from our illustrative numerical examples demonstrate the aforementioned attractive properties of our method.