I don't claim to be a DSL expert, but I don't think a DSL modem uses a dial up access line. It connects to the network on frequency much higher then a phone modem. That's why you need filters. But I guess that's besides the point. So your modem has do "something", before it connects to the internet, so that's probably why it doesn't work when set to always on, because your connection isn't always on. And maybe that's why the internet is blinking. It keeps turning the internet connection on, then it shuts down, warns you, then sends the command to turn it back on. Sorry, wish I had more info for you, but without knowing a lot more about how your ISP works and the way the modem functions, i can't make any suggestions. Have you tried calling your ISP and asking them what they suggest for a wireless router or access point?