Providing high-speed wireless data for customers involves much more than building lots of wireless towers. Carriers have to first purchase wireless spectrum to be able to increase upload and download capabilities for smart devices. That's why an upcoming FCC November spectrum auction is so important, as Verizon Communications (NYSE:VZ), AT&T, and T-Mobile (NASDAQ:TMUS) could potentially increase their wireless reach -- with T-Mobile poised for the biggest benefits.

What they're bidding for
The FCC is is opening up several blocks of wireless spectrum called AWS-3, or  advanced wireless services, and it could be one of the biggest auctions since 2008. AWS can be used for voice, text, and data which is often used for carriers' 4G and 4G LTE connections.

The FCC has set the price of the blocks at about $10.6 billion, and T-Mobile is selling senior notes to raise money for the auction. T-Mobile, as well as smaller regional carriers, have a strong interest in this spectrum auction because the blocks of wireless waves are divided up in such a way that carriers will be able to buy up airwaves in regions that they need it most, as opposed to just a couple of large spectrum blocks.

Adding more AWS spectrum can have huge benefits. Verizon's past purchases of AWS has enabled the carrier to boost its LTE speeds, and add additional LTE connections.

Potential problems
The AWS-3 spectrum is used by the Department of Defense and 17 different government agencies, according to Fierce Wireless. These agencies are either leaving the spectrum, or sharing it with carriers, opening up the potential for huge logistical problems. The balancing act between the government and carriers may slow some deployment of the spectrum.

A big deal for T-Mobile
One of the most interesting angles for the November auction is DISH Network's (NASDAQ:DISH) bid for spectrum. The satellite television company already owns about $26 billion worth of spectrum, and there's speculation DISH may try purchasing T-Mobile after the auction is over.

DISH's co-founder and chairman, Charlie Ergen, has been interested in purchasing a wireless carrier for several years. Ergen failed against SoftBank to purchase Sprint, but a T-Mobile acquisition could be just what he wants. To compete better with cable companies that offer streaming services, Dish is looking to use its current spectrum and a wireless carrier to rollout its own video streaming service.

Bloomberg reported last month that Dish may use the auction to both bid on airwaves, and also determine the value of its current spectrum holdings. If demand is high for the November auction airwaves, it could mean Dish's current spectrum is worth more than previously thought. This could give DISH more borrowing collateral as it vies for a T-Mobile bid.

Foolish thoughts
No matter what happens after the November auction, I think T-Mobile will ultimately gain the most. At the very least, the company will have snatched up more wireless spectrum to make even more gains against Sprint, and catch up to AT&T and Verizon's superior networks. T-Mobile's on track to outpace Sprint in terms of total customers, and has already proven it has a better network.

Back in August, T-Mobile fended off an offer from French telecom Illiad to purchase 56% of T-Mobile for $33 per share. New rumors have spread that, later this month, Illiad will come back with a new offer for the same price per share -- but for a larger stake. Deutsche Telekom -- which owns more than 66% of T-Mobile -- would have to approve the deal, and it wants closer to $35 per share.

While T-Mobile posted a $391 million profit in Q2 2014, the company would have posted a loss if it weren't for spectrum licensing revenue it received from Verizon. A purchase by Illiad, DISH, or a combination of both, could give T-Mobile the backing it needs to make its wireless business truly profitable.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.