A federal appeals court has struck down the Federal Communications Commission's net neutrality rules, which prohibited Internet providers from blocking or prioritizing Web traffic.

The decision on Tuesday is the latest in a lengthy legal battle over whether the FCC can regulate the Internet. In an opinion written by Judge David Tatel, the U.S. Court of Appeals for the District of Columbia found that the network neutrality rules contradicted a previous FCC decision that put broadband companies beyond its regulatory reach.

"Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers," Tatel wrote, "the Communications Act expressly prohibits the Commission from nonetheless regulating them as such."

At stake here is an Internet provider's ability to charge Web companies such as Netflix for better service, which public interest advocates say may harm consumers.

Verizon led the charge against the FCC's net neutrality order, suggesting in oral arguments last fall that it would like to pursue different service pricing models.

"I’m authorized to state from my client today that but for these rules we would be exploring those types of arrangements," said Verizon lawyer Helgi Walker in September.

In a statement Tuesday, FCC Chairman Tom Wheeler indicated he was considering an appeal to the decision.

"We will consider all available options, including those for appeal," Wheeler said, "to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans."

Broadband is currently classified by the FCC as an information service, a category that gives the agency a fairly limited set of regulatory options. If Internet providers were classified instead as common carriers, the FCC's rule would likely stand. In fact, the federal ruling on Tuesday upheld the FCC's net neutrality rules as a matter of principle; the problem is that the agency effectively tried to apply its powers in the wrong context.

Faced with this dilemma, the FCC may either choose to argue that its regulations do not fall under the rubric of common carriage, or attempt to reclassify broadband as a common carrier, according to outside observers. Neither path is likely to be easy, as major industry players are likely to resist any attempt to reclassify broadband under Title II of the Communications Act.

"The reclassification is politically tricky but legally clear," said John Bergmayer, a senior staff attorney at Public Knowledge, which supported the FCC's rule. "The other question involves lawyers arguing for hours about what is and isn't common carriage. That's politically easier, but legally more difficult."

Denying that the FCC's open Internet order reflects common carriage regulation isn't likely to be a winning strategy, said Tim Wu, the Columbia University law professor who first coined the term "net neutrality." That's because the very notion of non-discrimination is central to common carriage, an idea that itself dates back to medieval times.