I hate to even ask this, but since a neighbor of mine actually did this a couple of weeks ago and (obviously) got the same error message:
Are you sure you're plugging the phone line into the modem jack and not the Ethernet jack? On many laptops that come equipped with both interfaces the connectors are right next to each other; it's easy to plug into the wrong one, and the (smaller) phone line connector will fit into the Ethernet jack.
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Wombat At Large
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since Dec 2003