If you have an old-style dial-up modem, that is what happens - you cannot share the line between a phone and an analogue modem.
If you have an ADSL (Broadband) service you need ensure that ALL devices (phones etc.) that are connected to the telephone sockets are connected via Micro Filters.
If you have the latter service and you DO HAVE everything connected via filter, then you have line fault and should call your ISP.
T
January 2009