A method and apparatus of a network element that authenticates a transceiver and/or a field replaceable unit of the network element is described. The network element generates a stored transceiver signature using transceiver data stored in the removable transceiver and a nonce. In addition, the network element generates a hardware transceiver signature using data stored in secure storage of the network element and the nonce. If the stored transceiver signature and the hardware transceiver signature are equal, the network element uses the transceiver to communicate network data for the network element. Otherwise, the network element disables the transceiver.