Federal Communications Commission (FCC) Chairman Julius Genachowski said today that his agency's net-neutrality order doesn't cover private peering agreements, and thus won't affect the ongoing dispute between Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Level 3 Communications Inc. (NYSE: LVLT).

Genachowski and the other four members of the FCC were testifying on net neutrality before a House subcommittee this morning, when Genachowski offered that clarification, according to a Wall Street Journal report.

Genachowski called the dispute a private matter and said he hoped the two companies could work it out, the WSJ reported.

UPDATE: Level 3 is disputing this widely reported interpretation, saying in a prepared statement that the chairman "was careful to say that he did not have an opinion" about the Comcast/Level 3 dispute because it is not yet before the FCC and no facts have been formally gathered.

Level 3 is further insisting that Genachowski's comment doesn't apply to its case anyway: "The Comcast/Level 3 dispute is not about a peering agreement, because Level 3 does not have a peering agreement with Comcast." (Emphasis taken from the original.) Level 3 made it clear a formal complaint to the FCC may still be forthcoming.

Why this matters
The chairman's comments appeared to hand a victory to AT&T Inc. (NYSE: T) and the National Cable & Telecommunications Association (NCTA) , which had sought FCC clarification on the issue and, moreover, urged the Commission to reject Level 3's claims that the peering dispute is subject to the FCC's recently approved network-neutrality rules. (See Is Level 3 Right About Net Neutrality?)

Even as Genachowski was speaking, however, Level 3 was issuing its own missive, claiming AT&T and NCTA were using "flawed logic" in asking for clarification, and that if the FCC failed to apply its new rules to Internet backbone services, as well as Internet access services, it "would quickly render the Order meaningless."



For more
To see the ruling and follow the bouncing ball of the Level 3-Comcast dispute, please check out:

• Is Level 3 Right About Net Neutrality?
• Comcast: Level 3 Balks at Trial Offer
• Level 3: This Is Not a Peering Dispute
• Did Level 3 Know What It Was Getting Into?
• Level 3: Comcast Erected Web Video 'Toll Booth'
• New Bill Gives Net Neutrality Some Teeth
• MetroPCS Joins Fight Against Net Neutrality Rules
• FCC Votes to Approve Net Neutrality Rules

— Carol Wilson, Chief Editor, Events, Light Reading