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Sometimes paranoids are right to worry. Sen. Al Franken (D-MN) recently exposed a common practice long hidden by wireless carriers: they track your every keystroke and movement through software known as Carrier IQ (CIQ).

As Franken warned, “The average user of any device equipped with Carrier IQ software has no way of knowing that this software is running, what information it is getting, and who it is giving it to—and that’s a problem.”

Carrier IQ, located in Mountain View, CA, was founded in 2005 and is backed by a group of VCs. Its software is installed on about 150 million wireless devices through licensing agreements with AT&T, HTC, Nokia, RIM (BlackBerry), Samsung, Sprint and Verizon Wireless. It runs on a variety of different operating systems, including Apple OS and Google’s Android; however, it does not run on Microsoft’s Windows.

According to the company, its software is designed to improve mobile communications. CIQ is used to help businesses with GPS tracking of mobile devices and coordinate employee travel.

Running under the app functions, CIQ doesn’t require the user’s consent (or knowledge!) to operate. On Android phones, it can track a user’s keystrokes, record telephone calls, store text messages, track location and more. Most troubling, it is difficult to impossible to disable. (A report by the Electronic Freedom Foundation details how CIQ works.)

The controversy over CIQ came to light a few weeks ago when Trevor Eckhart, a security researcher exposed the extent of information accessible by the software; Eckhart has been attacked for working for a firm that is a potential rival to Carrier IQ. Nevertheless, his findings are disturbing.

Carrier IQ initially denied that there was anything suspicious about its software.  However, further analysis revealed a bug in the software that allowed SMS messages to be captured.

Making matters worse, Carrier IQ attempted to silence Eckhart with a cease-and-desist letter, demanding he replace his analysis with a statement disavowing his research. Bowing to online pressure, it withdrew the letter.

Concerns about CIQ’s tracking functions came to national attention last week when Sen. Franken questioned FBI director Robert Muller before the Senate Judiciary Committee. When probed by Franken, Muller assured the Senator that FBI agents “neither sought nor obtained any information” from Carrier IQ.

Following Muller’s Senate testimony, Andrew Coward, Carrier IQ’s VP of Marketing, told the Associated Press that the FBI is the only law enforcement agency to contact them for data. The FBI has yet to issue a follow-up “clarification.”

In the wake of the mounting scandal, most of the nation’s leading wireless providers were modifying how they implement CIQ. For an excellent recap of the controversy and a status report on which carriers and phones employ CIQ, check out Brad Molen’s article in Engadget.

As Sen. Franken reminds us, “People have a fundamental right to control their private information.” While referring to the CIQ issue, his words apply to a growing number of issues involving personal privacy and Internet services. These include what movies one rents or downloads, what books one buys or takes from a library, what email one exchanges over G-mail, what tractions one conducts at Amazon or what friends one has on Facebook. It’s time for new legislation to strengthen digital privacy rights.

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David Rosen is a writer and business-development consultant. He is author of the indie classic, Off-Hollywood: The Making & Marketing of Independent Films (Grove), originally commissioned by the Sundance Institute and the Independent Feature Project.  He can be reached at drosennyc@verizon.net. For more information, check out www.DavidRosenWrites.com and www.DavidRosenConsultants.com.

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