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Rander box and other stuff
Let's see -- an ISDN-quality (quality? I use the term loosely)
codec should be under $50 single quantity, the data rate isn't very
high so you don't need much of a CPU (6811 might even be enough, and
they're easy to interface to things -- lots of on-chip I/O). You'd
need a modem-style encoder for the output (running digital from
box-to-box -- "analog" scrambling (Time or Frequency domain) is way
too easy to break) so maybe another $50 DSP chip... after all, you
don't need to support 30 different baud rates, just one data rate with
perhaps a low-line-quality backoff.
The codec is pretty cheap, but you want a nice low bit rate so you can
send the encrypted data over the phone. Some talk of how to do this
is happening on sci.crypt. I have a scheme which I plan to float
around at the cypherpunks meeting on Saturday. However, the hardware
ends up being on the expensive side ($150 or so).