The complexity of today's data communication networks necessitates complete, realistic and sophisticated testing grounds for verifying and validating their functionality. Network testing grounds are restricted to laboratories and environments isolated from real life scenarios. Testing in production and commercial networks is typically forbidden since they present a high degree of risk factors for service availability. Additionally, the majority of today's communication network testbeds lack the scale and flexibility needed to properly represent a true networking environment. Before deploying live networks there is a need to have a network testing environment scalable and flexible enough where issues such as: network design, vendor interoperability, endurance, multiprotocol layer interconnectivity, a vendor's specific implementations of standards and network design viability have been verified to meet the requirements. In this paper a design and implementation of a next generation network is described, where both testing and production traffic coexist. NCIT*net 2 is an optical transmission network supporting end-to-end services over technologies such as Ethernet, SONET, MPLS and DWDM. The paper also discusses key technology aspects related to the functionality of equipment and network from a service point of view. These include the physical layer and network operation, as well as architecture and control. The testbed network is used for the deployment of networking services over the above technologies in order to verify service implementation, provisioning and assurance of quality of service requirements. This network also allows testing and evaluating systems, subsystems and components from different vendors in various interconnections. The paper goes further to describe, as an example, the tests designed and implemented for the analysis of MPLS based services over next generation networks.