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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)