A U.S. appeals court on Tuesday struck down the latest effort by the Federal Communications Commission to require internet providers to treat all traffic the same, a policy known as net neutrality. The FCC did not have the legal authority to enact the 2011 regulations, which were challenged in a lawsuit brought by Verizon Communications the U.S. Court of Appeals for the District of Columbia Circuit said in its ruling.

Verizon challenged the FCC's Net neutrality regulations that required broadband providers treat all traffic equally. Verizon has said that it would charge bandwidth hogs more since they take up more of its network.

According to the court ruling, FCC didn't have authority since it didn't classify broadband providers as a common-service carrier. Instead, broadband providers were deemed information service providers. A common carrier classification is what applies to telephone lines.

"For the second time in four years, the D.C. Circuit has ruled that the FCC exceeded its authority in attempting to regulate the Internet," said commissioner Ajit Pai. "It is time for the Commission to take no for an answer. Unless Congress acts, we should stay our hand and refrain from any further attempt to micromanage how broadband providers run their networks. We should focus on removing regulatory barriers to broadband deployment, not imposing unnecessary rules that chill infrastructure investment."

"We will consider all available options, including those for appeal, 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," said FCC Chairman Tom Wheeler.