It doesn’t.

While CIQ might “listen”* to a smartphone’s keyboard, it’s listening for very specific information. Company executives insist it doesn’t log or understand keystrokes. It’s simply looking for numeric sequences that trigger a diagnostic cue within the software. If it hears that cue, it transmits diagnostics to the carrier.

So, for example, if during a support call a technician asks a customer to enter a short code, CIQ will be listening for it; when it’s entered, CIQ will relay the appropriate diagnostic information to the carrier. Any keystrokes beyond that are ignored.

“The software receives a huge amount of information from the operating system,” Andrew Coward, Carrier IQ’s VP of marketing, told AllThingsD. “But just because it receives it doesn’t mean that it’s being used to gather intelligence about the user or passed along to the carrier.”

So what are we really seeing in security researcher Trevor Eckhart’s video, which shows Carrier IQ collecting all sorts of information about how a phone is being used and where?

“What the Eckhart video demonstrates is that there’s a great deal of information available on a handset,” says Coward. “What it doesn’t show is that all information is processed, stored, or forwarded out of the device.”

Okay. Then what information is being captured and passed along to the carriers who use Carrier IQ? Data related to call quality, battery life, device crashes — everything you’d expect, really.

“If there’s a dropped call, the carriers want to know about it,” says Coward. “So we record where you were when the call dropped, and the location of the tower being used. … Similarly, if you send an SMS to me and it doesn’t go through, the carriers want to know that, too. And they want to know why — if it’s a problem with your handset or the network.”

And Coward is quick to point out that CIQ isn’t doing anything nefarious with our text messages, either.

“We don’t read SMS messages. We see them come in. We see the phone numbers attached to them. But we are not storing, analyzing or otherwise processing the contents of those messages.”

The same is true of Web site URLs. CIQ has the ability to capture them, but not the associated content. So it might note a device having trouble accessing Facebook, but not the content on Facebook itself.

Which is reassuring. That said, CIQ still has the ability to capture a wide variety of user data. So who is determining what exactly is being collected?

The carriers. They decide what’s to be collected and how long it’s stored — typically about 30 days. And according to Carrier IQ, the data is in their control the whole time.

“It’s the operator that determines what data is collected,” says Carrier IQ CEO Larry Lenhart. “They make that decision based on their privacy standards and their agreement with their users, and we implement it.”

On this point, Lenhart is particularly emphatic. “We capture only the data they specify, and provide it to them,” he reiterates. “We don’t capture more than that.”

Which sounds a bit like “we only do what they asked us to,” but, as Coward reminds us, the carriers’ behavior is governed by their contract with customers.

“What’s actually gathered, stored and transmitted to the carrier is determined by its end-user agreement,” he says. “And, as I’m sure you’re aware, the carriers are highly sensitive about what data they’re allowed to capture and what they’re not allowed to capture.”

One last question: Does Carrier IQ share the data it collects with other third parties beyond the carriers? A vehement no from Lenhart. “The data is the consumer’s data,” he says. “We would never take that data and distrubute it to a third party. We are prohibited from doing that by our agreements.”

Trevor Eckhart did not respond to a request for comment.

(*Handy euphemism for “pattern match filtering.”)

Here’s a freshly released Carrier IQ statement:

MOUNTAIN VIEW, Calif., Dec 01, 2011 (BUSINESS WIRE) — To clarify misinformation on the functionality of Carrier IQ software, the company is updating its statement from November 23rd 2011 as follows:

We measure and summarize performance of the device to assist Operators in delivering better service.

While a few individuals have identified that there is a great deal of information available to the Carrier IQ software inside the handset, our software does not record, store or transmit the contents of SMS messages, email, photographs, audio or video. For example, we understand whether an SMS was sent accurately, but do not record or transmit the content of the SMS. We know which applications are draining your battery, but do not capture the screen.

“Having examined the Carrier IQ implementation it is my opinion that allegations of keystroke collection or other surveillance of mobile device user’s content are erroneous,” asserts Rebecca Bace of Infidel Inc. a respected security expert.

Privacy is protected. Consumers have a trusted relationship with Operators and expect their personal information and privacy to be respected. As a condition of its contracts with Operators, CIQ operates exclusively within that framework and under the laws of the applicable jurisdiction. The data we gather is transmitted over an encrypted channel and secured within our customers’ networks or in our audited and customer-approved facilities.

Carrier IQ is aware of various commentators alleging Carrier IQ has violated wiretap laws and we vigorously disagree with these assertions.

Our software makes your phone better by delivering intelligence on the performance of mobile devices and networks to help the Operators provide optimal service efficiency. We are deployed by leading Operators to monitor and analyze the performance of their services and mobile devices to ensure the system (network and handsets) works to optimal efficiency. Operators want to provide better service to their customers, and information from the device and about the network is critical for them to do this. While in-network tools deliver information such as the location of calls and call quality, they do not provide information on the most important aspect of the service – the mobile device itself.

Carrier IQ acts as an agent for the Operators. Each implementation is different and the diagnostic information actually gathered is determined by our customers — the mobile Operators. Carrier IQ does not gather any other data from devices.

CIQ is the consumer advocate to the mobile operator, explaining what works and what does not work. Three of the main complaints we hear from mobile device users are (1) dropped calls, (2) poor customer service, and (3) having to constantly recharge the device. Our software allows Operators to figure out why problems are occurring, why calls are dropped, and how to extend the life of the battery. When a user calls to complain about a problem, our software helps Operators’ customer service more quickly identify the specific issue with the phone.

Related Posts on Carrier IQ:

• Exclusive Interview: Carrier IQ Gets Transparent About Its Mobile Monitoring
• Carrier IQ: How to Hack Back Your Phone
  
• Carrier IQ Speaks: Our Software Monitors Service Messages, Ignores Other Data
• Apple: We Stopped Supporting Carrier IQ With iOS 5
• RIM, HTC, Google on Carrier IQ: Blame the Carriers
• Carrier IQ Improves My Wireless Service by Logging My Keystrokes? Please Explain.

Full Carrier IQ Coverage »

The company will soon give all users the option to use Facebook entirely over HTTPS, and recommends they do so if they use public Internet access points. It will also show members social captchas for authentication–where they must identify a few of their Facebook friends’ faces–whenever suspicious activity is detected on an account.

Facebook warned in a blog post that using HTTPS will slow down the site and isn’t compatible with all features, including some externally developed Facebook applications. It will roll out HTTPS access “slowly over the next few weeks” via its settings page, the company said.

Facebook still faces other ongoing security problems, such as spam, virus messages and wall posts. CTO Bret Taylor said yesterday the company had cut platform spam by 95 percent in 2010, but I believe he was referring to notifications and posts from applications, especially social games. Meanwhile, Facebook CEO Mark Zuckerberg’s public fan page was apparently hacked into yesterday and has since been taken down.

Please see the disclosure about Facebook in my ethics statement.

This week, I gathered up some useful shortcuts that come built into most of the BlackBerrys, even older models, made by Research In Motion Ltd. but not many owners actually use or know about them. Ironically, most of these shortcuts are conducted using a BlackBerry feature that the iPhone lacks: its physical keyboard. (The iPhone uses a virtual keyboard that appears on-screen only when needed.)

Some useful shortcuts are built into most BlackBerrys, even older models, though not many owners actually use or know about them. Most of these shortcuts are conducted using a BlackBerry feature that the iPhone lacks: its physical keyboard.

Some of these shortcuts are seemingly obvious, like number or capitalization locks, but others are more obscure, like codes that can be entered to display the BlackBerry’s precise signal strength. Some shortcuts are performed with a single keystroke; others work in conjunction with a trackwheel or trackball, depending on your BlackBerry model, and still others work when two keys are pressed simultaneously. BlackBerrys with condensed keyboards that use auto-correcting SureType may require extra or different keystrokes.

Navigation Simplified

A series of keystrokes work in various BlackBerry applications to make navigation much faster. Pressing the Space bar works like Page Down on a computer keyboard, moving down one screen per press. Holding Shift while pressing the Space bar moves in the opposite direction, like the Page Up key. To quickly move to the very top or bottom of a page, press “T” or “B,” respectively. Another way to page down or up through lists is to hold the ALT key while scrolling with the trackwheel.

Users can toggle between the BlackBerry’s running applications without the extra step of navigating back to the Home screen. To do this, press ALT and the Escape key, then release Escape and use the trackwheel to scroll through a display of icons that represent running programs until you reach the desired program, then release the ALT key to select that program.

Messaging Magic

Shortcuts in BlackBerry messaging can be a real boon when you’re trying to get work done quickly. While looking at a list of emails, hit “C” to immediately start composing a new email. When a specific email is highlighted, pressing “R” will reply to that message; “L” will reply to all and “F” will forward it. Hitting “J” while an email is highlighted will jump directly to the oldest message in that email chain.

A list of emails can be more neatly organized from the message screen by holding the ALT key and pressing a letter. “I” will alter the list to show only incoming emails, “O” will show just those emails that were sent. “P” shows a phone log, including dates and times, and “s” displays all SMS messages made or received on the BlackBerry.

In the body of a message, pressing the Space bar twice inserts a period and capitalizes the next word. When the left Shift key and ALT are pressed together, the keyboard’s number lock is on; the right Shift key and ALT work as the caps lock. Holding any letter down will capitalize it, saving users from pressing another key to do so. To type a letter with an accent, hold the letter key down while scrolling up or down with the trackwheel until you find the correctly accented letter.

Type Less, Say More

While composing emails, a series of AutoText codes can be typed in the email body to automatically display certain phrases or information. Typing “mynumber” and a space in the text of an email will automatically display your BlackBerry’s phone number. Similarly, when “LD” is entered the local date is displayed, and when “LT” is typed the local time appears.

If your email inbox is full and you can’t send emails, find out the PIN of your recipient’s BlackBerry and use it to message the person directly. (To find your own PIN, type “mypin” and a space into the body of an email. This code can be used to send PIN messages from one device to another without using the device’s usual email system.)

Geeky Codes

If you’re just dying to know some techie details about your BlackBerry, the “Help Me!” screen will be right up your alley. To view the “Help Me!” screen, press ALT, Shift and “H” simultaneously. This displays data that won’t matter much to the average person, such as the device’s vendor ID, platform and free file space. But it also shows the exact percentage of remaining battery power on the BlackBerry, which could be helpful if you aren’t sure how to interpret the imprecise battery indicator bars at the top of the home screen.

Another way to geek up your BlackBerry is to change its signal strength indicator from bars to numbers that tell how many decibels per milliwatt the device is transmitting. To do this, go to the Home screen and hold down the ALT button while typing “NMLL.” My BlackBerry displayed a minus 75 when I made this change. Strengths of minus 50 to minus 90 are said to be good, while anything higher, like minus 100, isn’t. Though this numerical indicator won’t likely be of any practical use, you could use it to turn to a friend and compare reception during an excruciatingly boring meeting.

One way to impress a technophile on a date is by pulling up a BlackBerry’s Event Log. To do this, go to the Home screen and hold down ALT while typing “LGLG.” This retrieves a long list of numerous confusing codes representing the functions that were performed on your device. The Menu screen in the Event Log gives users the option to clear this log, freeing up some BlackBerry memory, while an Options screen lets people set the log up to record only certain kinds of activities.

Finally, to reboot your BlackBerry without removing its plastic back and taking out the battery, press ALT, Right Shift and Delete simultaneously. More codes can be found in the blogosphere or in a special section of RIM’s Web site: http://na.blackberry.com/eng/support/blackberry101/tips/. Adopting just one of these shortcuts can significantly change the way you use your BlackBerry.

Edited by Walter S. Mossberg

Write to Katherine Boehret at mossbergsolution@wsj.com