Integrated OPtical EtherNet (iOPEN) network was earlier proposed as an integrated Ethernet and reconfigurable WDM network, which supports Ethernet transport services in campus area and metro area networks. In this paper we propose and study network operation mechanisms for iOPEN network to achieve cost-effective network operation. VLAN approach is extended to operate new lightpaths, to support QoS services and traffic engineering, and to retain the Ethernet simplicity features. The proposed operation mechanisms are evaluated over an iOPEN testbed network. Keywords - Metro Ethernet; optical networks; integrated networks