A US appeals court dealt a major setback on Tuesday to the efforts of US goverment regulators to force Internet service providers to treat all Web traffic equally.

The US Court of Appeals for the District of Columbia ruled in favor of broadband provider Comcast Corp. in a case seen as a test of the authority of the Federal Communications Commission (FCC) to enforce "net neutrality."

Net neutrality is the principle that ISPs provide the same speed and level of service to all Web users, regardless of size.

Net neutrality would prevent ISPs, for example, from blocking or slowing bandwidth-hogging Web traffic such as streaming video or other applications that put a strain on their networks or from charging different rates to users.

The three-judge appeals court ruled in the Comcast case that the FCC does not have the legal authority to regulate the network management practices of ISPs.

The judges said the FCC had failed to demonstrate it has the authority to prevent Comcast from interfering with the use by its customers of peer-to-peer networking applications, which consume large amounts of bandwidth.

The case ended up in court after two advocacy organizations, Free Press and Public Knowledge, challenged Comcast's 2007 blocking of peer-to-peer programs by some customers and the FCC issued an order barring the practice.

During his White House campaign, President Barack Obama came out strongly in favor of net neutrality, which is backed by companies such as Google, Amazon, Yahoo!, eBay and consumer advocacy groups, but opposed by telecommunications, wireless and cable companies.

Under its new chairman, Julius Genachowski, the FCC has begun drafting rules that would require ISPs to protect net neutrality.

The draft proposed rules would allow broadband Internet providers to conduct "reasonable network management" and block spam, unlawful content such as child pornography and files that infringe copyright.

But they would not be allowed to discriminate against lawful content.