How to change the banner of the telnet daemon when logging in
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From the telnetd man page:

The banner printed by in.telnetd is configurable.  The
default is (more  or less) equivalent to "`uname -sr`" and
will be used if no banner is set  in /etc/default/telnetd.
To set the banner, add a line of the form:

BANNER="..."

to /etc/default/telnetd. 
Nonempty banner strings are fed to shells for evaluation. 
The default banner may be obtained by:

BANNER="\\r\\n\\r\\n`uname -s` `uname -r`\\r\\n\\r\\n"

and no banner will be printed if /etc/default/telnetd contains:

BANNER=""