A U.S. appeals court upheld the Obama administration's landmark net neutrality rules on Tuesday, dealing a blow to internet service providers in a ruling that could ensure unfettered access to the web.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit backed the Federal Communications Commission's rules requiring broadband providers to treat all data equally rather than giving or selling access to a web "fast lane."

The ruling handed a major victory to the administration and boosted the FCC in its bid to complete action on several major internet privacy rules before the end of the year.

FCC chairman Tom Wheeler said in a statement the "ruling is a victory for consumers and innovators who deserve unfettered access to the entire web, and it ensures the internet remains a platform for unparalleled innovation, free expression and economic growth."

The appeals court agreed that the FCC was right to reclassify broadband as a telecommunications service. The court noted that "over the past two decades, (website) content has transformed nearly every aspect of our lives, from profound actions like choosing a leader, building a career, and falling in love to more quotidian ones like hailing a cab and watching a movie."

So-called net neutrality is a major issue for broadband providers like Verizon Communications Inc and Comcast Corp, which fear the rules may make it harder to manage internet traffic and make investment to provide additional capacity less likely. It is also a big concern for content providers like Netflix Inc and Yelp Inc , worried that access to customers could be limited without net neutrality.

Lawyers for the internet service providers had argued that because they exercise some control over functions like cached pages they met the burden as an information service provider, which would limit how extensively the FCC could impose net neutrality rules.

But the FCC said broadband providers were acting merely to transport data, not making content decisions.

An open internet spurs innovation and helps improve broadband infrastructure, the FCC asserted, saying network companies plowed $230 billion into the web over 2011-2013, when open internet rules were in effect.