Internet backbone network is undergoing a large-scale transformation from the current complex, static and multi-layer electronic-based architecture to the emerging simplified, dynamic and single-layer photonic-based architecture. The explosive growth in the Internet, multi-media services, and IP router links are demanding the next generation Internet that can accommodate the entire traffic in a cost-effective manner. There is a consensus in current industries that IP over WDM integration technologies will be viable for the next generation of the optical Internet where the simplified flat network architecture can facilitate the networking performance and the networking management. In this paper, we firstly propose a novel node architecture-Terabit Optical Router (TOR) for building the next generation optical Internet and analyzes each key function unit of TOR including multi-granularity electrical-optical hybrid switching fabrics, unified control plane unit and so on. Secondly, we discussed the unified control plane unit of TOR in detailed Thirdly we describe our cost vs. performance analysis for various application of TOR. According to our evaluation carriers can get a cost reduction of more than 60 percent by using the TOR. Finally, we reach conclusions that TORs rather than OBS or BFR(Big Fat Router) routers, a cost effective multi-granularity switching and routing technique, are feasible to build the next generation Internet.