We study the upgrading problem of existing Passive Optical Networks (PONs) that need to increase their capacity at different points in time. Our method upgrades line rates and migrates network services over new wavelength channels based on increasing traffic demand and cost constraints. Our method minimizes capital expenses and system disruptions, while ensuring effective resource usage. Our multistep model uses Mixed Integer Linear Program (MILP) formulations whose cost parameters are set by a pricing policy. We evaluate the PON upgrade through installation of single-wavelength transceivers or multiple-wavelength arrays of transceivers. We consider a typical case study, which is solved using CPLEX. Illustrative examples demonstrate the attractive properties of our method.