Hi Chris,
A bit of confusion creeping in here.
All 'Transponders' are passive devices, which only transmit when interrogated - normally by a radar unit or an aircraft TCAS system.
(This is the main significant difference between transponders and ADSB devices - which actively transmit relevant information independently of external interrogation.)
Old 'Mode A' transponders only transmit a squawk code. Although to our eyes this is a 4 figure numeric code, it is actually transmitted 'digitally' as a packet of '1's and '0's, which when received have to be decoded back to the 4 figure number to indicate the allocated Squawk, allowing the ATC operator to determine which of the many 'blips' on his or her radar screen is you.
When transponder technology moved on to 'Mode C', the old 'Mode A' squawk transmissions continued as before, but an altitude code was added to assist the ATC operator by letting him or her know at what altitude the 'blip' is flying. This additional information is ONLY transmitted if you have your transponder set to 'Alt' - which is what the ATC operator refers to when you hear them say to a Mode 'C' (or sometimes Mode 'S') equipped aircraft - 'Squawk (1234....) '...with Charlie'. When 'Alt' is selected, the aircraft's altitude is transmitted in response to an altitude specific radar interrogation as well as the squawk code, both digitally expressed as packets of '1's and '0's, which need to be decoded at the other end - in our case in our PAW. It is these groups of '1's and '0's which Lee then has to compare with 'known values' to establish whether they relate to a squawk code or an altitude. In our case, without a radar screen, the 'squawk' from a Mode 'A' or 'C' transponder on its own is of very little use as at best all it will tell you is that there is an aircraft about but with no indication of where or of the other aircraft's relative height. Unfortunately, without a 'Hex' code - only provided in Mode 'S'- there is no easy way of grouping squawk and altitude information to represent a single aircraft. When assessed together with PAWs signal strength algorithms, however, the altitude information from Mode 'C' - with Charlie 'on', does allow us to provide meaningful information on the level of danger presented by the unseen 'bearingless' Mode 'C' aircraft.
So in the case of 'Mode C' the altitude information comes from the 'Alt' part of the Mode 'C' transmission, NOT from the squawk code part.
Hope this helps clarify the situation - believe me, although I've tried to keep it simple it is anything but!
Regards
Peter