If spectrum is the coin of the wireless realm — and it is — Dish Network is Scrooge McDuck, sitting atop a pile of the stuff that seems to get more valuable by the day. Rather than cashing in by playing the role of spectrum speculator, though, Dish stands to gain more in the long run by partnering with T-Mobile USA and building out an LTE network to compete with AT&T and Verizon Wireless. Such a move would enable Dish to offer a potent triple play of mobile, TV and high-speed satellite broadband.

AT&T’s aim: more spectrum or less competition?

AT&T made an overt play for Dish’s spectrum last week when it lobbied the FCC to not place any restrictions on the transfer or leasing of the airwaves, even as it asked the Commission to impose strict conditions (including a timeline) on the buildout of a Dish LTE network. Dish predictably fired back, claiming that its plan to build a retail (rather than wholesale) network would take substantially longer than AT&T’s proposal.

But the spat between the two seems to be less about building a network and more about posturing over spectrum, as my colleague Kevin Fitchard documented last week. And it is far from clear that AT&T really needs Dish’s spectrum anyway: Nomura recently said that “the spectrum positions are not that dissimilar” between Verizon and AT&T, with AT&T’s holding about 103 MHz and the nation’s largest carrier claiming about 120 MHz. In other words, AT&T may just be trying to off the potential competition by acquiring spectrum rather than using those airwaves to expand its network.

Regardless, a proposed AT&T pickup of Dish Network’s spectrum might not be approved by federal regulators. The FCC and the Department of Justice are keenly aware of the dangers of a mobile duopoly, as evidenced by their opposition to AT&T’s proposed acquisition of T-Mobile USA, and they could move again to make a spectrum acquisition very difficult for AT&T.

Dish’s best bet

Dish Network’s best option is to move ahead with the network buildout it says it has been planning all along. But mobile is a very different game than TV. Just ask Cox Communications, a cable TV provider that in November pulled the plug on its effort to become a carrier. The consolidated field makes it tough for a newcomer to break in, and building a network from the ground up is an expensive proposition.

That’s why Dish needs a partner that has a presence in wireless, and T-Mobile USA is an ideal fit. T-Mobile already claims the country’s deepest “spectrum depth” (a formula incorporating both spectrum and the percent of the U.S. population covered) on the Advanced Wireless Services (AWS) band, according to the Baird Equity Research estimates, and it will receive about 7 MHz more from AT&T, thanks to the breakup fee. Add Dish’s 5 MHz of spectrum depth in the 700 MHz band to the mix, and the two companies could forge the path to LTE that T-Mobile so desperately needs to compete with its bigger counterparts. The merged company would then be in the position to offer a potent trifecta of 4G mobile service, satellite TV and the high-speed satellite broadband that Dish trotted out at CES last month. And that would enable Dish to compete with massive players like AT&T and Verizon, which can package their mobile services with cable TV, Internet and landline phones.

A merger would make sense for T-Mobile parent Deutsche Telekom, too, which has long neglected its U.S. network operator. In addition to paving the way to a faster network, the partnership would provide opportunities that integrate T-Mobile’s terrestrial network with Dish’s satellite operations. Those opportunities could be especially fruitful in the rural markets that Dish is targeting with the new broadband offering.

Dish Network simply doesn’t have enough spectrum to make much of a dent in the U.S. mobile market on its own, but a tie up with T-Mobile would suddenly make the nation’s fourth-largest carrier a threat. A merger would also challenge the AT&T–Verizon Wireless duopoly and create some much-needed competition among the major wireless carriers. That is a goal that the FCC has been working for years to achieve, and it is one that could benefit consumers in a big way.

Question of the week