For increased security encrypted sessions are available. These sessions can be requested by the client or mandatory by the server.
Encrypted sessions are implemented using Microsoft’s Crypto system built within Windows. It uses the RSA industry standard 40-bit or 128-bit encryption algorithms for the tightest security available. To get 128-bit encryption, the 128-bit version of Windows should be installed. A typical Windows version will generally give 40-bit encryption.
A session will be encrypted, if the client connects with a request for encryption, otherwise the session will be in clear text. See instructions on the Console Telnet Client. Adding a /N argument to the Console Client command line, will request an encrypted session. At this time, Pragma's Console Telnet Client is the only client that supports the proprietary telnet negotiation for encryption. There is no RFC standard for telnet encryption.
To allow only encrypted sessions to a server, add a /E command line parameter to the TelnetServer InetD service. On the InetD Configuration tab, modify the TelnetServer service and add /E to the arguments edit box. Any client connecting to the server without encryption will be rejected by the server.