In a 6-to-3 decision, the court said the law on the matter was ambiguous and that the Federal Communications Commission, not the courts, had the authority to interpret it.
The ruling is a blow to consumer groups who want more competition in Internet services and to the leading providers of slower dial-up Internet service, like America Online and EarthLink. The dial-up sellers have had limited ability to offer faster, broadband service because they have largely been shut out of cable systems, which have been the most popular form of broadband service.
The case, National Cable and Telecommunications Association v. Brand X Internet Services, turns on a rule adopted in March 2002 that called cable Internet service an "information service" rather than a "telecommunications service."
The Telecommunications Act of 1996 calls for strict regulation of providers of telecommunications services, subjecting them to taxes and calling them common carriers. Such providers are required to sell access to their networks on a nondiscriminatory basis. Providers of information services, by contrast, are largely unregulated and untaxed.
In a case brought by Brand X, a small Internet service provider in Santa Monica, Calif., the United States Court of Appeals for the Ninth Circuit rejected the commission's interpretation. The appellate court said that cable Internet service, can be divided into two parts - simple data communication, which should be regulated as a telecommunications service, and more elaborate information services. As a result, it ruled that the cable companies needed to make the basic telecommunications part of their service available to rivals.
The commission disagreed, concluding that cable Internet service is a single offering and that data transmission alone cannot be considered a stand-alone telecommunications service. Writing for the majority in overturning the appeals court decision, Justice Clarence Thomas, cited a 1984 case, Chevron U.S.A. v. Natural Resources Defense Council, in which the court ruled that administrative agencies have the authority to interpret ambiguous statutes.
"If a statute is ambiguous, and if the implementing agency's construction is reasonable, Chevron requires a federal court to accept the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation," Justice Thomas wrote.
In a dissent, Justice Antonin Scalia, wrote that the commission's ruling was trying to further a free-market agenda, through "an implausible reading of the statute, and has thus exceeded the authority given it by Congress."
Justice Scalia rejected the commission's argument that cable Internet service combines Internet access, which is communication, with additional services, like e-mail message ability, and therefore is an information service.
The commission's rules have traditionally forced telephone companies to share their networks for a form of broadband service known as digital subscriber lines, or D.S.L. In 2002, however, the commission proposed changing those rules to remove the requirement that phone companies sell access to their D.S.L. network to rival companies.
In the decision yesterday, Justice Thomas wrote that the commission had the right to change those rules, but the court said it had no opinion on whether it should do so.
Kevin J. Martin, the chairman of the F.C.C., in 2002 supported changing the D.S.L. rules for phone companies and was expected to now press for their adoption.
"As I have advocated in the past, we should treat D.S.L. provided by telephone companies the same as we treat similar cable modem services provided by cable," Mr. Martin said in an e-mail interview.
Such a rule could have a significant effect on Internet providers, especially EarthLink, which has 1.5 million broadband subscribers, mainly through phone companies.
David Baker, vice president of EarthLink, said the company did not think that its access to D.S.L. service was likely to be cut off.
"It's one thing for the F.C.C. to say we will not expand access rights in cable and another to say we will close down consumer choice on the D.S.L. side," he said, noting that were the commission to try to do that, Congress might intervene.
A coalition of consumer groups, including Consumers Union and the Consumer Federation of America, called on Congress to clarify the law to protect consumer choices.
It argued that the F.C.C. gave the "cozy duopoly" of cable and phone companies the right to limit choice and competition in Internet services.
Kyle McSlarrow, the chief executive of the National Cable and Telecommunications Association, disputed that view, arguing that there is fierce rivalry between cable and phone companies over Internet service, with new rivals coming into the field, including wireless data providers and electrical utilities, which have the technology to provide Internet access over power lines.