The communicator supports PPP authentication protocols PAP (Password Authentication Protocol) [RFC 1334] and CHAP (Challenge Handshake Authentication Protocol) [RFC 1994]. Of these two, CHAP is the more secure as it does not transmit the password over the network.
PAP works basically in the same way as the normal login procedure. The client authenticates itself by sending a user name and a password to the server, which the server then compares to its database.
With CHAP, the server sends a randomly generated "challenge" string to the client. The client combines this with its password and a one-way hash function; it then returns the result to the server. The server does the same computation and will then grant access if the client-supplied response matches that generated by the server. CHAP also sends challenges at regular intervals to ensure that an intruder has not replaced the client.