I'm really getting alarmed at all these ppp errors folks seem to be getting with the Actiontec serial modem. There just seems to be a rash of them here lately, and I'm not sure what the problem is. I've used mine with just about every major distro and with kernels from 2.2 to 2.6.10 and it has never failed me.
This leads me to believe their might be something different with some ISP's that I'm not experiencing, or maybe there is some sort of configuration in kppp that is causing the problem. To all who are recieving this error, I presume you are using kppp? I've had better luck all the way around with wvdial. It's a command line dialer that is easy to configure and use. You might want to try it if you are now using kppp. Then, if you ARE using wvdial, try kppp.
I wish I could help more...