Thanks for the additional details. This isn't a common problem, so that's why I asked. Before trying to futz with any advanced settings, this sounds like your telephone may be defective (it may have a low impedance on-hook, resulting in just enough current flowing to cause the OBi to think it's still off-hook). Also, if you have connected the phone line to your premise's telephone wiring, be sure that the service to the external telephone company has been completely disconnected at the demarcation box (not just shut off by the telco, but the wires removed from the terminals). I'd suggest trying a different telephone, plugged directly into the OBi, and see what happens.