An IP gateway device establishes distinct TCP sessions within a single FCIP tunnel, each TCP session being designated for a different priority of service (e.g., high, medium, low), plus a control stream. Each TCP session has its own TCP stack and its own settings for VLAN Tagging (IEEE 802.1Q), quality of service (IEEE 802.1P) and Differentiated Services Code Point (DSCP). By distributing data streams assigned to different priorities of service into different TCP sessions within the FCIP tunnel, an IP gateway device can preserve the distinctions between the data stream priorities while the data traffic is within the IP network. By further distributing the data streams between different circuits and trunks by use of multiple circuits, failover and load balancing can occur within the FCIP tunnels.