Since that time, I have not been able to get the modem to dial. Have spent many hours troubleshooting, reinstalling the 5699 modem in a Gateway running Win95, working with USR Tech Support, having USR send me a new modem (they thought the original one was bad), and still the modem won't dial.

The modem has always installed and AT comes back OK. In the process of troubleshooting, I hooked a phone to the phone connector in the back of the modem to try and listen to what the modem was trying to do. Now the really weird part starts.

The modem will only dial and connect if there is a phone attached to the modem and if the phone handset is left off hook? If so, it handshakes and connects fine.
USR says NO WAY !! I say WAY!! They have had me change a few of the S register settings. I have tried X3, etc until I am blue in the face.

Do you have any clues as to what I need to do or do you have any recommendations for a PCI modem that will work under NT 4.0?

Any help or ideas would be greatly appreciated.

Try reversing the phone/line cords at the modem and see if same holds true (because the other reason what you describe could happen is that you have the cords in the wrong jacks at the back);

If the modem is bad it would behave same in another computer....