Phone service does not work properly (phone and interet through telephone wire)

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The issue involves a malfunctioning phone and internet connection, specifically with DSL service. Initial troubleshooting revealed rusted wires, which were reconnected, temporarily restoring functionality. However, the phone and internet stopped working again after hanging up the phone, resulting in a busy tone and inability to receive calls. The internet operates only when the phone is off the hook, and the phone company has declined to assist due to the problem being deemed a household issue.To address the problem, suggestions include resetting the connection box, testing with different devices, and ensuring a DSL splitter is used to separate the phone and internet signals. It is also noted that multiple filters may be necessary to ensure proper functionality. If these steps do not resolve the issue, it is likely a problem on the phone company's end that requires their intervention.
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My phone and internet stopped working during two days ago.. to troubleshoot i found that the wires in the box were rusted so i restripped and reconnected them..

After this I got a steady dial tone and the internet was working properly (simultaneously)..

The next morning both the phone and internet were out again. I checked the connection again and got a dial tone and the phone was working with the internet until i hung up the phone. When i hung up the phone and picked it back up I could not get a dial tone but got a busy tone instead.. when i called the phone with a cell it was also busy.

The internet is working fine as long as the phone is not off the hook. (still no dial tone) however when i "reset" the connection, the phone is only good for one use (busy after the internet modem finishes resetting. If the phone is in use as soon as the connection is reset, both internet and phone work simultaneously until the phone is hung up.

Other details
Phone and Internet come through a phone wire..
The internet is DSL and not dial-up.
Cannot receive incoming calls.
Phone company will not fix this as it is past their incoming, and is a problem with the house.

Any ideas on how to fix this?
 
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It may very well be a logic issue with the phone company. Comcast provides my box, which separates the phone+internet signal coming into the house via RJ-11 wiring, and sends it to my phone and wireless router, respectively.

By "box" did you mean this setup, the large green/gray "box" of telco wires on the streetcorner? The small, usually beige box attached to the outside of your house? Or an internal box like the one I described above?

If it's like mine, try:

1. Resetting the box. Usually this will check for and download a new firmware.

2. Connect a computer and phone directly to the box and repeat the experiment.

3. Manually download and update the firmware.

If it's like the other two, try a friend's computer or a friend's phone, or both. If the problem still isn't resolved, it's the phone company's problem and they need to get it in gear and get on out there.
 
You should have a DSL splitter (http://en.wikipedia.org/wiki/DSL_filter) to isolate the internet and phone lines.
In my experience you have to try a couple of units to get one that works - you can even end up with one that works on line but not an other.
 
Yep. NS is correct. You want filters on your lines.
 
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