Telnet can be started as part of the TCP/IP stack, or, beginning with z/OS V1R6, it can run in its own address space separate from the stack. Typically, it will be started as part of the TCP/IP stack. However, you may consider running it in its own address space for one of the following reasons:
If you decide to start the Telnet server it its own address space, there are special considerations for operator command processing, CTRACE set up, Resolver search order, SNMP, and RACF (or other security product) setup. These are described in z/OS Communications Server IP Configuration Guide (SC31-8775) in the "Accessing remote hosts using Telnet" chapter.