This problem seems to still exist. I just switched to Vonage VOIP with Florida Cable internet service. I've done a lot of checking to no avail. It still comes back to the inability of the DS7000 (actually two different consoles with the same problem, both purchased in about 2008); they both work fine with our previous CenturyLink line.
If I pick up a second phone on the VOIP line at the same time the console alarms, I can hear the dial tone generated by the DS7000 as it successfully dials my cell phone. I've tried connecting the DS7000 to the phone 1 line directly on the Vonage ATA and no calling occurs. I did listen on the DS7000 ear bud and could hear faint number dial tones, but they are not recognized by Vonage.
My fax machine dials out successfully, and also received faxes.
I've tried various setups with splitter, no splitter, and house wiring, all to no avail.
It just seems to come around to the DS7000 not being able to generate an off-hook signal.
Vonage has not be able to offer an help other than make changes to the line more favorable to data even though I reminded them that the problem was not data as faxing work. Vonage personnel didn't seem to understand any of the technical aspects of going off-hook.
X10 tech didn't have an answer by phone, either.