One little point here: the ONTs don't contend for an optical slice of the download/downstream. Every ONT receives all the downstream for all ONTs however it discards everything that's not addressed to it and can't decrypt traffic heading to other ONTs either.
Surely that makes it a contended service?
The bandwidth available in both directions is limited and way beyond the capacity required to serve all CPEs at their peak rate. Time division is used, both for contention and to manage the mixed requirements to each CPE. Those who require more bandwidth (and with a suitable plan) will get considerably more slices of time than CPEs with a basic plan.
At the stage where the total bandwidth demanded by the CPEs exceeds the overall maximum capacity the time slots are reduced in size, reducing the bandwidth for customers towards their (probably differing) prioritised rates, rather than the peak rates.
