Almost certainly the way your phone and modem are connected but you don't say how npor do you say whether the modem is internal or external.
However, often modems and phones are 'daisy chained' that is to say one plugs to the other and then to the wall socket. Ensure that you have the plugs in the modem the right way round. One socket will say 'Phone' , plug the phone into that one, and the other 'Line', plug the cable from the wall socket into that one. Altenatively you may have a faulty phone. Try removing it and dialling out with the modem.
Terry
June 2006