Dish makes a mysterious investment. Could it be Clearwire?

An interesting tidbit popped up in Dish Network’s(s dish) quarterly filing with the SEC (pdf) this week: the satellite TV provider has made a $396 million investment of debt in an unnamed “single issuer.” That statement stirred up financial analysts, who believe that the issuer can only be 4G carrier Clearwire(s clwr), a potential partner for Dish’s planned rollout of a wholesale LTE network.

According to the filing, the issuer would “need substantial additional capital to meet its  business and financial obligations beyond the next 12 months.” That sounds an awful lot like Clearwire, which recently raised new funds to get its LTE network off the ground and is strapped for operational capital.

UBS analyst John Hodulik said Dish management won’t confirm whether the investment is in Clearwire, but chairman Charlie Ergen did hint at the possibility at Dish’s second quarter analyst call. “Ergen reiterated that it would make sense for DISH to enter the wireless business with a partner that’s already in the space,” Hodulik said in a research note.

Why would Dish need the ailing Clearwire? Well, Dish claims it wants to become a mobile carrier, using recently acquired satellite spectrum to build an LTE network, access to which it would sell wholesale to other carriers and virtual operators. I have doubts that Dish truly intends to use that spectrum. It’s likely putting on a show for the FCC so it can get its satellite airwaves reclassified for terrestrial use, after which Dish would flip them for a quick and substantial profit.

But if Dish does plan to build a network, partnering with Clearwire would be logical step. Clearwire has the expertise and much of the infrastructure in place to host and run a future Dish network. It just doesn’t have the money.

Meanwhile, Ergen is trying to pressure on the FCC for permission to build a network. Currently the S-band frequencies Dish holds are allocated for “ancillary terrestrial” use, meaning it can only use LTE to offer supplemental capacity for a satellite broadband network – much like Sirius XM(s siri) uses ground transmitters to boost its satellite signals in urban areas.

Dish wants the FCC to grant it a flat out waiver – much like it granted to LightSquared – to build a terrestrial only network, effectively turning its frequencies into a new cellular band. The FCC, however, wants to examine the satellite communications spectrum as a whole, deciding whether to permanently reallocate portions of it for mobile broadband. That means Dish will have to wait for the FCC to deliberate, and Ergen doesn’t want to wait.

At Dish’s earnings call, Ergen made the bold statement that Dish would launch a hybrid satellite-LTE service if it failed to get FCC permission for its 4G-only network, Light Reading reported. Ergen claimed that there is small market for satellite handsets that Dish could tap into, but that’s a bluff if I’ve heard one. Ancillary licenses like Dish’s have been around for years and no company has succeeded in making the hybrid model work. In fact, Dish bought its spectrum for two companies that went bankrupt trying to offer just such services.

Dish photo courtesy of (CC BY 2.0) Flickr user Dave Lindblom.