I understand the meaning of this field, and how it is used.
But I can't find an example for when it is needed, I read that it is used in Telnet, why?
When do I need this flag?
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It is essentially obsolete. But Jeremy Stretch has a good write-up about it.
Let’s say telnet is initiated from a client. If the server,for some reason cannot pass requested data to client ( since client is advertising window 0) - the command just hangs.
To avoid this, the server sends a segment with urg flag set along with the urg pointer set too.
The client once reading this will have to accept data from the server.