A US court has rejected the Biden administration's bid to restore "net neutrality" rules, finding that the federal government does not have the authority to regulate internet providers like utilities.

It marks a major defeat for so-called open internet advocates, who have long fought for protections that would require internet providers such as AT&T to treat all legal content equally.

Such rules were first introduced by the Federal Communications Commission under former Democratic president Barack Obama but later repealed during Republican Donald Trump's first term.

The decision, just as Trump is poised to enter the White House for a second term, likely puts an end to the long-running legal battle over the issue.

In their decision, the judges noted that different administrations have gone back and forth on the issue.

But they said the court no longer had to give "deference" to the FCC's reading of the law, pointing to a recent Supreme Court decision that limits the authority of federal agencies to interpret laws, a decision that critics expect will be used to weaken regulation in the years ahead.

"Applying Loper Bright, means we can end the FCC's vacillations," the Sixth Circuit Court of Appeals said.

Brendan Carr, a Republican member of the FCC who Trump has tapped to lead the agency, said he was pleased the court had invalidated the Biden administration's "Internet power grab".

The FCC's outgoing Democratic commissioner said the ruling turned the issue over to Congress.

"Consumers across the country have told us again and again that they want an internet that is fast, open, and fair," Jessica Rosenworcel said.

"With this decision it is clear that Congress now needs to heed their call, take up the charge for net neutrality, and put open internet principles in federal law."

The fight over net neutrality was once a heated issue in the US, pitting internet providers against big tech companies such as Google and Netflix.

Comedian John Oliver famously urged his audience to express support for the rules, leading to a deluge of comments that crashed the government's site.

But the issue has faded in prominence since the rules were repealed in 2018.

Thursday's ruling does not affect state-level net neutrality laws, which in some places offer similar protections.

But advocates, like Mr Oliver, have said that national rules are important to preventing internet providers from having powers to throttle certain content or charge more for speedy delivery of their service.

Public Knowledge, a progressive-leaning internet policy group, said the decision had weakened the FCC's power to shape privacy protections, implement public safety measures and take other action.

It said it believed the court had erred in ruling that internet service providers were simply offering an "information service" rather than acting as telecommunications companies.

"The court has created a dangerous regulatory gap that leaves consumers vulnerable and gives broadband providers unchecked power over Americans' internet access," it said.

But USTelecom, an industry group whose members include AT&T and Verizon, said the decision was "a victory for American consumers that will lead to more investment, innovation, and competition in the dynamic digital marketplace."