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Wireless firm settles key suit

Boston Communications Group Inc. agreed to pay $55.3 million to settle a patent suit and ensure that the company can remain in business. Shares more than doubled on the news.

Boston Communications lost a May 2005 jury verdict in Boston that it infringed patents owned by closely held Freedom Wireless Inc. for prepaid services which let consumers pay for calls in advance rather than being billed. The jury awarded a total of $128 million, and a judge later ordered Boston Communications to stop providing the service. The ruling was put on hold while the Bedford-based company appealed.

``We believe that the decision we've made to enter into a settlement with Freedom Wireless is the most prudent path forward to preserve and enhance the value of our business," chief executive E.Y. Snowden said.

Shares rose $2.09 to $4.01 Nasdaq Stock Market trading, the highest price since the May 2005 verdict was disclosed. It was the biggest one-day percentage gain since the company first sold shares in 1996. They're up 81 percent in the past year.

Boston Communications said it would pay Freedom Wireless $55.3 million for all claims through June 30, 2006, and royalties through February 2007. The total payment by all defendants in the case will be $87 million, Boston Communications said. The company also will pay royalties after March 1, 2007.

Separately, the company said the Securities and Exchange Commission has begun an informal inquiry of its stock option practices between 1998 and 2002.

The SEC said it's investigating more than 80 companies for possible wrongdoing related to the backdating of employee stock options.

The company said it is reviewing its practices and believes that the grant dates may have been altered and it may need to restate its earnings for that period.

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