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AT&T eyes smaller rivals for spectrum, WSJ says

Fresh off of its failed takeover of T-Mobile, AT&T is looking to get back into the acquisition hunt, this time eyeing Dish Network, MetroPCS, and Leap Wireless.

AT&T CEO Randall Stephenson speaking last year during Mobile World Congress.
Kent German/CNET

Well, that didn't take long.

AT&T appears ready to get back in the hunt for more spectrum, now eying smaller wireless rivals MetroPCS and Leap Wireless and satellite-TV provider Dish Network, according to The Wall Street Journal.

The Dallas-based telecommunications giant is just two months removed from the collapse of its deal with T-Mobile USA, which would have given the company additional spectrum, allowing it to bulk up its network and better handle the rising tide of cellular traffic driven by smartphones, tablets, and other connected devices.

The T-Mobile deal was essentially halted by regulators as anti-competitive, but that hasn't stopped AT&T from looking elsewhere. The company is in early talks with these companies, and a deal may not emerge for months, according to the Journal. At least early in the talks, Leap appears to be the most likely partner, while MetroPCS is considered the least likely because of a falling out over MetroPCS's vocal opposition to the T-Mobile deal.

AT&T declined to comment to CNET. Leap, MetroPCS, and Dish all declined to comment.

While AT&T's takeover attempt at T-Mobile was deemed to hurt competition in the industry, the company is banking that scooping up the smaller regional wireless carriers will be less of an issue. AT&T, meanwhile, both competes against and partners with Dish on its satellite-TV service. AT&T offers its own pay-TV service under its U-Verse brand.

AT&T, like the other wireless companies, are scrambling for more spectrum. Rival Verizon Wireless secured its position after acquiring spectrum from the cable providers in a $3.6 billion deal. LightSquared's attempt to build a wireless network appears doomed, which would eliminate another source of spectrum. Another government auction of spectrum is at least a year away.

It's unclear what kind of relationship AT&T has with the FCC. Last month, AT&T CEO Randall Stephenson blasted the FCC for tanking its deal during a rare appearance on the company's quarterly conference call. He accused the FCC of picking winners and losers in how it approves deals.

Leap appears to be a favorite of AT&T. The two companies had some discussions last year when AT&T was looking to divest assets for the T-Mobile deal, according to the Journal. Such a deal would give AT&T access to spectrum in several markets.

Less likely is a deal with MetroPCS after the company's opposition to the T-Mobile deal. The Wall Street Journal also reported that talks over potential divested assets hadn't gone well.

The problem with either deal is MetroPCS or Leap alone would only give spectrum to cover parts of the country. Only after acquiring both would AT&T get a nationwide swath of spectrum from the prepaid carriers.

A more immediate answer would be Dish, which has a large swath of spectrum acquired from DBSD North American and TerreStar Networks, which both filed for bankruptcy. The deal was worth $2.8 billion. Its spectrum is similar to that of LightSquared, but without the GPS interference issue, making it attractive. AT&T is also looking at Dish as a potential target.

Dish has said it is opening to partnering and brought up T-Mobile as a potential ally.

AT&T and Dish have long been bandied about as potential merger partners, although it's unclear whether AT&T has any interest in entering the national pay-TV business.

Updated at 8:31 a.m. PT: to include responses from Leap, MetroPCS, and Dish.