When I set up my Verizon DSL a couple of weeks ago, I had to put a filter thing (supplied with the package) on my regular phone connection. (I have only one line so the DSL and phone happily share it now.) Did you use such a filter at the fax connection to the data line? If not, perhaps there's a chance the DSL signal (or whatever it might be called) confused the fax machine enough that it didn't detect a dialtone.