The LFC makes the distinction based on PCP bits, using PCP 4 to identify "Discard Ineligible" frames.
Forgive me if I'm being a bit thick but some questions spring from that: - By high priortity/low priority tagging do you mean at layer 3 IP (expedited forwarding in diffserv?) or layer 2? - If a home router were to tag all egress traffic as high priority then would it work the way you say it wouldn't above - i.e. the first 2.5Mb/s guaranteed and the rest entering into contention. - And would that high priority tagged traffic then win out over low priority traffic in that contention?