In this paper, we propose and evaluate a new deflection transmission scheme for communication between local customers in a passive optical network (PON). In particular, we provide an analytical model to approximate the average packet delay of the proposed scheme in a local area network (LAN) operating within the PON (referred to as LAN-PON system). The accuracy of our model is validated by simulation. Furthermore, our simulation results show that a LAN-PON with a deflection scheme can achieve > 80% bandwidth gain using < 125 mu s switching time compared to that of the traditional PON system for the cases studied.