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Error 692: Hardware Failure in Port or Attached Device

Try resetting the modem.
Be sure the correct modem is being used by the dial-up connection.
Be sure multiple modems are not installed.
Adjust the modem handshake to negotiate the connection.

Also see the following Microsoft Knowledgebase article: Q314846: "Error 692: Hardware Failure in the Modem" Error Message When You Dial an RAS Server (Windows XP; Windows 2000)

Help us help you! If you contact Mojave Mesa support for assistance please write down any error messages you get when trying to connect to the Internet. Include the name and version of your operating system and the exact text of all error messages. If this information is included in an online case submission or provided to a support representative, it will greatly speed up the troubleshooting process.

Please be aware that some troubleshooting may require uninstallation and reinstallation of operating system files. To ensure that this type of troubleshooting can be accomplished if required, please be sure that you have to have original Operating System CD or Operating system source files on disk on hand.