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A new methodology to scan automated radar terminal system (ARTS-III) data for aircraft tracks exhibiting probable mode-C encoder/transponder faults is described. The tracks of more than 8000 climbing or descending aircraft, recorded at the Seattle-Tacoma terminal area, were analyzed using this method. Based on this sample, the probability of the previously recognized "stuck C-bit" error is estimated to be 0.44 percent (0.31-0.61 percent, 95 percent confidence). In addition, a new, more subtle error, here termed the "deficient response," was discovered which is estimated to occur with a probability of 0.77 percent (0.59-0.98 percent, 95 percent confidence). Subsequent tests found this new error to have much less impact on traffic alert and collision avoidance system (TCAS) performance than does the stuck C-bit error.