I have just experienced this bug.

MSN had been working fine for weeks, then suddenly today (a few days
after changing my account information - wasn't sure whether that was
connected or not) I get the "Network error" message.

telepathy-butterfly wasn't running on my system, so I restarted and then
MSN is working again.

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Network error when trying hotmail.com
https://bugs.launchpad.net/bugs/545751
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