A U.S. appeals court ruled on Thursday that the Federal Communications Commission (FCC) does not have the legal authority to restore net neutrality rules, marking a significant setback for the Biden administration’s internet policies.

The ruling came after President Joe Biden signed an executive order in 2021 urging the FCC to reinstate the net neutrality rules, which require internet service providers (ISPs) to treat all internet data and users equally. This includes prohibiting the blocking, throttling, or prioritizing of certain content.

Net neutrality rules also prevent ISPs from offering faster speeds or improved access to favored users, emphasizing the principle that internet service is a public utility.

The decision from the Cincinnati-based 6th U.S. Circuit Court of Appeals follows the Supreme Court’s decision in the Loper Bright case earlier this year, which reshaped the authority of federal agencies. The court concluded that the FCC lacked the authority to reinstate the rules initially implemented in 2015 under former President Barack Obama, which were repealed in 2017 under President Donald Trump.

This ruling allows state-level neutrality rules in places like California to remain intact, but it may diminish federal oversight of the internet landscape.

Jessica Rosenworcel, the FCC Chair, has called upon Congress to reconsider net neutrality and enact relevant laws, emphasizing the need for legislative action. Meanwhile, industry groups like USTelecom, representing major companies such as AT&T and Verizon, have celebrated the ruling, suggesting it would enhance investment, innovation, and competition within the digital marketplace.

On the other hand, advocates for net neutrality have expressed anxiety about the ruling, with indications that some may seek a review by the Supreme Court to challenge the decision. The outcome effectively halts the Biden administration’s attempt to restore the net neutrality framework while perhaps redirecting focus towards improving internet access and promoting online innovation.