Technical Description of OBD-II Trouble Code
Generic: The circuit range/performance of the transmission range sensor “A”
General Motors: Performance issue with the transmission range sensor
Jaguar: Missing dual linear switch signals
What does that signify?
This diagnostic trouble code (DTC) is a generic powertrain code, which means it is applicable to OBD-II equipped vehicles. Although it is a generic code, the specific repair steps may vary depending on the make and model of the vehicle.
P0706 is a generic powertrain DTC in the transmission controls subsystem group. This is classified as a “C” type DTC. “C” type DTCs are not related to emissions, so the powertrain control module (PCM) does not activate the check engine light or store freeze frame data.
The transmission range sensor may also be known as the park/neutral switch (PN) or the neutral safety switch. Its purpose is to inform the PCM about the position of the gear shifter and to allow the engine to start only in the park and neutral positions. The PCM sends a voltage reference to the sensor, and the sensor sends a different voltage back to the PCM depending on the gear selected by the shifter. If the returned voltage is incorrect, this code will be triggered.
Example of an external Transmission Range Sensor (TRS):

TRS image from Dorman
Symptoms & Severity of the Code
Due to the neutral safety switch being part of the transmission range sensor, the vehicle may start in any gear position and/or the PCM may force the transmission into “limp” mode. In this mode, there is a noticeable lack of power, especially when starting from a complete stop.
When this code is present, there is a serious safety concern because the vehicle may start moving upon start-up if it is in gear. It is important to address this problem immediately.
Causes
Possible causes for this code to be triggered are:
Diagnostic and Repair Procedures
There are two possible conditions that can trigger this code:
Condition #1 – The PCM detects drive or reverse at vehicle start-up
Condition #2 – The PCM detects park or neutral, and the following conditions exist for 10 seconds or more: >Throttle position is 5% or more: >engine torque is greater than 50ft.lbs. >Vehicle speed is greater than 20 MPH
In my experience, this code is most commonly found in four-wheel drive trucks that have been used for off-roading and have sustained damage to the range sensor and/or harness. It is very rare for a faulty PCM to be the cause of this code. The diagnosis of this code is relatively straightforward. SET THE PARKING BRAKE.
Begin with a thorough visual inspection of the range sensor and wiring harness. Repair any damage that is found. Does the vehicle start in reverse/drive? If it does start, unplug the range sensor and try starting it in reverse/drive again. If it still starts, suspect a short in the harness. If it does not start, suspect a faulty or misadjusted range sensor.
Related Transmission Range Sensor codes: P0705, P0706, P0707, P0708, and P0709.