BT and TalkTalk have been refused the right to appeal the High Court's decision to uphold the Digital Economy Act.
Last month, the judiciary sided with the government over the controversial legislation, which imposes a duty on broadband providers to tackle illegal filesharing.
Under the act, broadband providers will be required to send warning letters to individuals suspecting of copyright violation, and potentially disconnect them from the internet.
BT and TalkTalk demanded a judicial review of the Act, on the grounds of incompatibility with EU law and insufficient parliamentary scrutiny.
However, Mr Justice Kenneth Parker ruled that the legislation does not breach consumers' privacy rights, instructing that the law should stand on the statute books.
The Court of Appeal's refusal to look into the matter comes as another heavy blow to BT and TalkTalk, as the broadband providers attempt to have the anti-filesharing legislation repealed.
Speaking to OutLaw.com, a spokesperson for the latter said the firm was currently considering its position.
It is believed that one or both of the broadband providers could now choose to take the matter to the European Courts.
Pinsent Masons' technology lawyer Claire McCracken told the news provider that a declaration that the Digital Economy Act was incompatible with EU laws would have put pressure on the government to revisit the legislation, which was rushed through in the final days of the last parliament.
"Broadband providers are concerned that they will invest millions of pounds to comply with the provisions of the act, only to find out in the long run that it is contrary to EU laws," she stated.
"The fact that BT and TalkTalk may now have to consider a reference to the European Court only adds to the uncertainty and regulatory burden for the [broadband providers]".
Speaking to V3, a government spokesperson welcomed the Court of Appeal's decision and the judge's recognition that measures in the Digital Economy Act are both lawful and proportionate.
"The government remains committed to tackling online piracy and so will set out the next steps for implementation of the Digital Economy Act shortly," they stated.