Unplug the telephone line from the back of the computer and put a telephone instrument on the line and see if you have dial tone. If you do not then you have to start tracing the physical line back to see where it plugs into the house wiring and see where you get dial tone. It could be a bad telephone cable The modem will NOT work until you have dial-tone on the telephone line.
I suspect the line is probably good but something happened to the modem.
Turn off the computer and then restart it.
Windows 98 or 2000 or XP go into the control panel (classic view XP) and click on the Modem ICON, Phone and modems options in XP. Click on the modems tab and insure your modem is listed. Not listed re-install modem.
If listed click on the properties button at the near bottom of the box. A new box opens click on the diagnostic tab and click on the query modem button... Wait.. In the results box insure the ATI2 result comes back success. If you get success at least you know the modem is talking to the computer it still could be a bad modem but less likely.
Open you dial up box that you use to make a connection and change the telephone number to a friend or your cell phone and click dial. Insure that the modem is actually dialing. Or go to start run and type in dialer and hit enter. Click dial and enter a phone number and see if the modem actually makes a phone call. If you still cannot make a telephone call it is a bad modem.
If yes the modem software is corrupted. Right click on My computer choose properties click on the hardware tab and choose device manager then click on the + in front of modems and highlight your modem. Right click the mouse and un-install it. When its done click on the Action at the top of the box and Scan for Hardware changes this will put the modem back in the computer. Restart the computer.
Try it again and if it still fails it is most likely a bad modem replace it. USB models are about $25 http://www.nextag.com/HIRO-V-92-56K-526417544/prices-html