AT&T, Verizon and other large incumbent providers are not putting as much capital into their wireline network infrastructure, leaving them open to further challenges from cable operators, says Moody’s in a new research note.

The research firm noted that outside of Verizon’s FiOS FTTH deployments, the overall U.S. telecom industry has not kept pace with cable in terms of broadband.

“Except for Verizon’s FiOS footprint, the US telecom industry has underinvested in broadband,” said Mark Stodden, VP and senior credit officer for Moody’s Investor Service. “Market share gains of cable operators will persist given the capital required to catch up.”

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RELATED: AT&T, Verizon, CenturyLink and other telcos lost nearly 150K broadband subs in Q3, says LRG

Verizon, whose wireline footprint now runs from Boston to Washington, D.C., started taking orders in Boston for FiOS service just last week.

While Verizon has hinted that it could take what it calls a “one fiber” network model to other cities that would satisfy wireline consumers as well as local businesses and wireless initiatives, Boston is the only new city it has named for FiOS thus far.

Fellow telco AT&T says it is continuing to invest in next-gen broadband networks. Earlier this week, AT&T announced that it has reached 46 markets with its 1 Gbps FTTH service. However, it’s unclear how broad the coverage and take rates for the services are in these markets.

Cable’s comfortable lead

Telcos’ broadband subscriber woes continued in the third quarter as the top telcos collectively lost about 150,000 subscribers, widening the loss of about 145,000 they saw in the same period a year ago.

According to LRG Research, telcos have had net broadband losses in five of the past six quarters. Cable MSOs, meanwhile, added about 2.44 million broadband subscribers, while telcos lost about 475,000 subscribers.

The top telcos' third-quarter broadband results were a mixed bag.

AT&T saw IP broadband revenues rise 12% year-over-year, adding 156,000 new net IP broadband customers. Still, the telco continues to see legacy DSL subscriber declines. The telco reported that it lost a total of 5,000 broadband subscribers, narrowing Wells Fargo’s estimate of 15,000.

For Verizon, the third quarter was recovering from FiOS losses due to the wireline labor strike in the second quarter. Verizon added a total net of 90,000 FiOS internet connections. Net broadband subscribers rose by 24,000 in the quarter.

Meanwhile, CenturyLink reported that it lost 40,000 subscribers in the quarter, ending the quarter with a total of 5.95 million subscribers, down sequentially from 5.99 million in the second quarter. The service provider attributed the losses to its ongoing efforts to tighten its credit policies for broadband subscribers.

But Frontier saw the largest broadband subscriber declines in the third quarter. Similar to CenturyLink, Frontier’s own efforts to shore up its credit policies and establish a call and support center in the United States resulted in the telco losing over 99,000 customers during the quarter.

Stodden said that “wireline revenues will continue eroding as cable operators gain broadband share.”

Regulatory uncertainty

Moody’s isn’t the only one noticing the broadband investment patterns of the telcos.

In a report released earlier this year, the Progressive Policy Institute, which ranks capital spending among top U.S. companies and industries, noted slower growth in the telecom sectors due to regulatory uncertainty.

Now that Donald Trump has been elected, two of the key issues that continue to be a concern for large telcos are net neutrality and privacy, which were heralded by outgoing FCC Chairman Tom Wheeler.

Wheeler, a Democrat who just announced he will depart from the regulator in January, will likely be replaced by a pro-business Republican who will seek to overturn these reforms.

USTelecom, the champion of the traditional telcos, revealed in its annual broadband investment research report that broadband provider network capital expenditures declined nearly $1 billion in 2015 to $76 billion.

While the 2015 decline was small when compared to past economic cycles, USTelecom said the broadband industry investment is a core component in capital investment spending and contributes to the overall health of the U.S. economy.

Regardless of the issues telcos face, US Telecom said in its report that wireline broadband investment “remains critical to modernizing the nation’s network infrastructure and maintaining strong international leadership.”