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Hello, I am assuming the modem is external. I seen this problem if there is no ground connection between the modem and the computer. I have seen serial cables that do not use pins 1 or 7 (or the 9 pin connector equiv.) and use the shield of the cable connected to the shell instead (including the metal piece on the outside of the connector itself) to make the ground. If the connector on the computer or modem does not have metal in the shell part then the ground connection is not made. It works on AC power because the ground is made through the ground pin on the power supply. 73 Eric ecottrell@doble.com >Also, my hayes optima modem works just fine when the unit is on AC power. >However, if I switch to battery mode, the >modem stops transfering data. It maintains the connection with the other side >and if I go back to AC power, it >works again. Is this common on the 701 or the optimas? >