Apple USB Modem

I am trying to help a friend set up her new computer. She purchased a brand new iMac and an Apple USB modem. She lives in an area where she can only connect to the internet via dialup.
The iMac is running system 10.5.4. The USB modem is plugged directly into the back of the computer, not a hub. The phone line and connection are fine on the old blueberry iMac.
Now for the problem -- the computer recognizes the modem, dials, and attempts to connect with her ISP provider which is LocalNet. However, it never authorizes and a disconnect occurs. The error message is "Could not negotiate a connection with the remote PPP server. Please verify your settings and try again."
I have spent HOURS on hold with LocalNet, and have spoken with their technical support three times. No one seems to be able to figure out the problem and they are blaming it on the modem. Are there any known issues with Apple's USB modem? Does anyone have any suggestions? What should I do next?

You should look into authentication parameters, username, password and connection options your dial-up provider requires! If the modem is new, and also if its dialing, most likely there is nothing wrong with it - it tries to connect, but it fails the authorization procedure... thus you need to look into authentication parameters \ settings... that's my 2c thought :))

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