That means oral arguments in a recording industry infringement lawsuit against an alleged peer-to-peer pirate will not be streamed online.

Harvard Law School professor Charles Nesson is representing student Joel Tenenbaum in the case. Earlier this year Nesson requested that the proceedings be streamed to Harvard’s Berkman Center for Internet and Society, which in turn would deliver it to the world.

U.S. District Judge Nancy Gertner approved the request in January, but the Recording Industry Association of America appealed, claiming the judge’s ruling violated federal court guidelines and would hamper the recording industry’s ability to get a fair trial.

Yesterday, the appeals court sided with the recording industry and reversed Judge Gertner’s January decision.

“This is not a case about free speech writ large, nor about guaranty of a fair trial,” the court wrote, but about “the governance of the federal court.”

The Associated Press, the New York Times and 12 other news organizations had urged the appeals court to allow the streaming. Furthermore, in a concurring opinion, Judge Kermit Lipez, while agreeing Gertner erred in allowing the webcasting of oral arguments, said that current rules prohibiting the streaming of court proceedings should be re-examined.

Tenenbaum has the unlucky distinction of being the subject of one of the last, high-profile lawsuits conducted by the recording industry against piracy. Last year the RIAA announced it would stop filing copyright infringement lawsuits against individual Internet users, but would continue prosecuting existing cases.

When a summons arrived with his name on it, Tenenbaum offered to settle out of court for $500. Since most P2P lawsuits have been settled by defendants paying anywhere from $3,000 to $5,000, Tenenbaum’s $500 offering wasn’t even considered by the labels.

Instead, the record companies asked for $12,000 to settle. Tenenbaum refused, and now he’s facing a possible $1 million payout if he loses the lawsuit.