A federal appeals court struck down parts of the Federal Communications Commission's "net neutrality" laws Tuesday, ruling that the agency does not have the authority to require Internet service providers to treat all traffic equally. This is, to put it mildly, a big deal for the people fighting for the open Internet.

In the decision of Verizon v. FCC, a 2010 challenge to the net neutrality rules, the DC circuit court vacated the anti-discrimination and anti-blocking policies that required ISPs to deliver all Internet traffic equally. Effectively, that means service providers can now deliver certain content at a faster pace, or block content all together, at will. But the court also preserved disclosure policies opposed by Verizon — meaning service providers will have to make public which websites are being blocked and which ones receive preferential treatment.  

Of course, the battle is not over and FCC chairman Tom Wheeler already announced they're considering whether to appeal the court's decision, which would take the issue to the Supreme Court. In either case, they will almost certainly have to craft new rules or seek new regulatory powers from Congress.

The Circuit Court did not necessarily sympathize with Verizon's desire to police what Internet they provide to consumers. The problem was in the FCC's poorly constructed open Internet policies. Unlike telecommunications companies, Internet service providers are not classified as "common carriers," which must pass information on their networks freely, without prejudice. Yet, the rules they devised basically tried to treat ISP as if they were common carriers, and the court was not okay with that. The court found the FCC had no basis to regulate what content is delivered by Internet service providers, writing that "because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order."

If the decision stands, what does this this mean for you, the average Person on the Internet? Well, everything will depend on who you receive your Internet from, but GigaOm peaks into the future here

The upshot of Tuesday’s ruling is that it could open the door for internet giants like Verizon and Time Warner to cut deals with large content providers — say Disney or Netflix — to ensure that their web content was delivered faster and more reliably than other sites. This could not only restrict consumers choice but also provide a threat to smaller websites who do not have the resources to pay for any “express lanes” that the broadband providers but choose to create.

Or to put it in more alarming terms: 

Both the court and net neutrality defenders agree the FCC should have the authority to regulate Internet service providers; they just don't. The court agreed with Verizon that only Congress has that power at the moment, but in his ruling, Judge David Tatel chastised lawmakers for not enabling the FCC to police Internet service providers. Tatel acknowledges that "regulation of broadband Internet providers certainly involves decisions of great 'economic and political significance,'" but concludes "we have little reason given this history to think that Congress could not have delegated some of these decisions to the Commission."

Similarly, Craig Aaron, President of Free Press, a net neutrality defense group, criticized previous FCC regimes for failing to harness the necessary power to prevent today's ruling. “The FCC — under the leadership of former Chairman Julius Genachowski — made a grave mistake when it failed to ground its open Internet rules on solid legal footing," Aaron said in a statement. "Internet users will pay dearly for the previous chairman’s lack of political will."