wrong key response when telnet'ing from linux to unix
 

I have SuSE Linux Professional 9.0 on my pc at work. Our main server is
SCO UnixWare7. When I telnet to UnixWare7 the keys don't respond correctly.
E.g. backspace displays ^?, function keys display ^[[1. When running a
character-based COBOL program on the UnixWare7 while telnet'ing from linux,
function keys act like the Esc key. The system variable TERM displays as
'xterm'. I have tried setting TERM to 'wy60', 'ansi', and 'vt100'. The
keys still don't respond correctly.