Over the years, Dish Network Corp. (DISH) - Get Report CEO Charlie Ergen has spent billions stockpiling a giant horde of wireless spectrum in spite of having no network to use it on, wagering that someone will value it enough to strike a favorable deal with Dish, if not buy the satellite TV provider outright.

Jeff Bezos, no stranger to making big, expensive bets himself, is reportedly open to an alliance that could allow Ergen to finally receive some kind of payoff for his massive gamble. But just what kind of payoff depends on whether Amazon.com Inc. (AMZN) - Get Report is ready to spend the billions needed to start offering soup-to-nuts mobile services plans to U.S. Prime subscribers. Or if, as is more likely, Bezos has more modest ambitions.

The Wall Street Journal reports Bezos and Ergen have discussed an alliance through which a Dish network financed in part by Amazon would be used to provide wireless services for one subset of Amazon customers or another. Sources caution "no deal is imminent," and that it's "unclear" if one will be inked.

Among the reported possibilities: Amazon would help finance Dish's existing efforts to build a relatively cheap "5G-capable" network for IoT devices. A more ambitious option: Amazon would help bankroll a network that would let it give Prime members the chance to "pay a little more a month for a connectivity or phone plan." A third option still is for Amazon to "offer a one-way broadcast signal for Amazon Prime Video on a slice of Dish's airwaves."

An IoT network deal would give Amazon cheap connectivity for its Prime Air delivery drones, as well as for telematics systems used by trucks and other mobile logistics assets. It could also be used to provide connectivity for devices relying on Amazon Web Services' (AWS) IoT services.

A Prime Video broadcast signal, perhaps using the LTE Broadcast standard, might be a useful option for delivering popular content -- for example, new episodes of hit original series -- in densely-populated areas. But it could only be used to deliver a fraction of the content in Prime Video's giant library. And depending on the specifics, it might not be easy for consumers signed up for another carrier's mobile services to access the signal.

Offering discounted wireless voice and data service plans to an estimated 50 million U.S. Prime subscribers would provide one more big incentive for Prime subs to stay loyal to Amazon, and perhaps aid Amazon's efforts to sign up more lower-income consumers. Jeff Bezos has talked about wanting to make Prime, whose list of perks and discounts seems to grow by the month, such a good deal that consumers deem it "irresponsible" not to join. Cheap wireless plans would fit with that goal.

But building a 4G mobile network from scratch to offer such services would be a gargantuan multi-billion dollar undertaking, even if Dish only built it out in major urban areas and relied on roaming deals to provide services elsewhere. In addition to the cost of the network itself, big marketing, customer support and retail store investments would be needed to take on mobile incumbents whose huge investments are supported by revenue from many tens of millions of paying subscribers.

Moreover, building out such a network at a time of heightened price competition -- driven by a share-gaining T-Mobile US Inc. (TMUS) - Get Report and a desperate Sprint Corp. (S) - Get Report -- seems especially questionable. Particularly since competition could soon get fiercer still thanks to the arrival of cable providers relying on their Wi-Fi networks and deals with existing carriers to provide mobile services.

None of this seems to be lost on Ergen. "We do not believe that it serves the public interest or makes business sense to build out a 4G/LTE network now that would duplicate networks already offered by the wireless incumbents, and subsequently require an almost immediate upgrade in order to be competitive," Dish said earlier this year, while unveiling its plans to build a cheap IoT-focused network.

And from the looks of things, even this network is only being built to comply with FCC mandates stipulating that Dish provide signal coverage for much of the spectrum it owns in the 700MHz band (good for rural and in-building coverage) and the 2GHz band (good for urban coverage) by 2020. If not for the mandates, Dish might be content to let this spectrum, along with airwaves in nearby bands, remain fallow for now.

Regardless, Dish is pushing ahead with plans to build the IoT network. And it could be in deep-pocketed Amazon's interests to help pay for the effort, given the various devices Amazon -- either directly, or on behalf of clients -- could connect to the network. Such a low-risk partnership wouldn't necessarily prevent Dish, which has reportedly held M&A talks with the likes of Sprint and T-Mobile before, from later pursuing a bigger deal with a U.S. mobile incumbent.

That is, unless Bezos is ready to make a much larger and riskier wireless bet than what his company has signaled to date.

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