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Worm in the wild
Okay, when you still run a system without the patches for the telnetd vulnerability, when you still run a system with an activated telnetd, when you still run your system with access to telnet from the complete internet without a tcpwrapper or a packet filter …. okay … that you really deserve that your system will be automatically owned by this worm.
To reiterate it the millionth time: Don´t use telnet, when you have to use it, patch your system and limit access to the the systems that really needs it. Another suggestion: There is a good implementation of IPsec in Solaris. . You find the documentation in at docs.sun.com unter “How to Secure Traffic Between Two Systems With IPsec”. You can kill two bird with one stone: Disallow all traffic to telnetd that didn´t came from secured system and you circumvent the problem of the unencrypted nature auf telnetd. But: SSH would give you the same with less work. The above is only a solution when you really can´t substitute telnet.