New submitter realized writes "Yesterday Carrier IQ released a report (PDF) which tries to answer some questions about how their system operates. Also, after reports of the FBI using Carrier IQ data, the company responded by saying, 'Carrier IQ has never provided any data to the FBI. If approached by a law enforcement agency, we would refer them to the network operators.' Additionally, the EFF just released a report which says they believe keystroke data 'is in fact being inadvertently transmitted to some third parties,' but they would like to study carrier profiles to verify information." Reader Trailrunner7 adds that Carrier IQ's report indicates "under some limited circumstances its software will log the contents of SMS messages sent to a user's phone, but that that the contents of those messages would not be human readable. Instead, they would be in an encoded form that could not be decoded without special software and the carriers don't have access to the contents of the messages either. The company said it has worked on a fix for the bug, which affected devices running the embedded version of the Carrier IQ agent."