Public bug reported:

AT&T (worldnet) dialup cannot be accessed with Dapper or Feisty (never
tried Edgy) due to failures in CHAP authentication.  Details discovered
here may include aspects of bug 28616.  Attempts were made to configure
Dapper dialup with the network tool, wvdial and then pppconfig, which
seemed to be the most complete.  Many attempts were made with various
options in /etc/ppp/option and /etc/chatscript and
/etc/ppp/peers/worldnet (final config file name) to no avail.  Even the
original CHAT settings and options file from a working TurboLinux
Desktop 10 system were used, to no avail.  The general failure from
/var/log/syslog (with 'debug' set in options) is:

Apr 25 15:46:56 localhost kernel: [17182960.112000] CSLIP: code copyright
        1989 Regents of the University of California
Apr 25 15:46:56 localhost kernel: [17182960.156000] PPP
        generic driver version 2.4.2
Apr 25 15:46:56 localhost pppd[8021]: pppd 2.4.4b1 started by root, uid 0
Apr 25 15:46:57 localhost chat[8022]: abort on (BUSY)
Apr 25 15:46:57 localhost chat[8022]: abort on (ERROR)
Apr 25 15:46:57 localhost chat[8022]: abort on (NO CARRIER)
Apr 25 15:46:57 localhost chat[8022]: abort on (VOICE)
Apr 25 15:46:57 localhost chat[8022]: abort on (NO DIALTONE)
Apr 25 15:46:57 localhost chat[8022]: abort on (NO ANSWER)
Apr 25 15:46:57 localhost chat[8022]: send (ATL2M1W2^M)
Apr 25 15:46:57 localhost chat[8022]: expect (OK)
Apr 25 15:46:57 localhost chat[8022]: ATL2M1W2^M^M
Apr 25 15:46:57 localhost chat[8022]: OK
Apr 25 15:46:57 localhost chat[8022]:  -- got it
Apr 25 15:46:57 localhost chat[8022]: send (ATDT123-555-1234^M)
Apr 25 15:46:57 localhost chat[8022]: report (CONNECT)
Apr 25 15:46:57 localhost chat[8022]: expect (CONNECT)
Apr 25 15:46:57 localhost chat[8022]: ^M
Apr 25 15:47:15 localhost chat[8022]: ATDT123-555-1234^M^M
Apr 25 15:47:15 localhost chat[8022]: CONNECT
Apr 25 15:47:15 localhost chat[8022]:  -- got it
Apr 25 15:47:15 localhost chat[8022]: send (\d)
Apr 25 15:47:16 localhost pppd[8021]: Serial connection established.
Apr 25 15:47:16 localhost pppd[8021]: using channel 1
Apr 25 15:47:16 localhost pppd[8021]: Using interface ppp0
Apr 25 15:47:16 localhost pppd[8021]: Connect: ppp0 <--> /dev/ttyS0
Apr 25 15:47:16 localhost pppd[8048]: pppd 2.4.4b1 started by root, uid 0
Apr 25 15:47:16 localhost pppd[8048]: tcsetattr: Invalid argument (line 972)
Apr 25 15:47:16 localhost ntpdate[8054]: can't find host ntp.ubuntu.com
Apr 25 15:47:16 localhost ntpdate[8054]: no servers can be used, exiting
Apr 25 15:47:17 localhost pppd[8021]: Hangup (SIGHUP)
Apr 25 15:47:17 localhost pppd[8021]: Modem hangup
Apr 25 15:47:17 localhost pppd[8021]: Connection terminated.
Apr 25 15:47:17 localhost pppd[8048]: Exit.
Apr 25 15:47:18 localhost pppd[8021]: Exit.

When /usr/sbin/ntpdate was defeated (renamed), the two lines relating to
that went away.

Next, the binary pppd from the working TurboLinux installation (2.4.1)
was copied in place of Dapper's /usr/sbin/pppd, the owner/group and
permissions were set to that of Dapper's program, and 'pon worldnet' was
again executed with the following results in /var/log/syslog (note
compensation for line wrapping were manually editted, as well as changes
to ipnames and ip addresses):

Apr 26 15:33:46 localhost kernel: [17179894.596000] CSLIP: code copyright
        1989 Regents of the University of California
Apr 26 15:33:46 localhost pppd[5710]: pppd 2.4.1 started by root, uid 0
Apr 26 15:33:46 localhost kernel: [17179894.616000] PPP
        generic driver version 2.4.2
Apr 26 15:33:47 localhost chat[5711]: abort on (BUSY)
Apr 26 15:33:47 localhost chat[5711]: abort on (ERROR)
Apr 26 15:33:47 localhost chat[5711]: abort on (NO CARRIER)
Apr 26 15:33:47 localhost chat[5711]: abort on (VOICE)
Apr 26 15:33:47 localhost chat[5711]: abort on (NO DIALTONE)
Apr 26 15:33:47 localhost chat[5711]: abort on (NO ANSWER)
Apr 26 15:33:47 localhost chat[5711]: send (ATZ^M)
Apr 26 15:33:47 localhost chat[5711]: expect (OK)
Apr 26 15:33:47 localhost chat[5711]: ATZ^M^M
Apr 26 15:33:47 localhost chat[5711]: OK
Apr 26 15:33:47 localhost chat[5711]:  -- got it
Apr 26 15:33:47 localhost chat[5711]: send (ATDT123-555-1234^M)
Apr 26 15:33:47 localhost chat[5711]: report (CONNECT)
Apr 26 15:33:47 localhost chat[5711]: expect (CONNECT)
Apr 26 15:33:47 localhost chat[5711]: ^M
Apr 26 15:34:05 localhost chat[5711]: ATDT123-555-1234^M^M
Apr 26 15:34:05 localhost chat[5711]: CONNECT
Apr 26 15:34:05 localhost chat[5711]:  -- got it
Apr 26 15:34:05 localhost chat[5711]: send (\d)
Apr 26 15:34:06 localhost pppd[5710]: Serial connection established.
Apr 26 15:34:06 localhost pppd[5710]: using channel 1
Apr 26 15:34:06 localhost pppd[5710]: Using interface ppp0
Apr 26 15:34:06 localhost pppd[5710]: Connect: ppp0 <--> /dev/ttyS0
Apr 26 15:34:06 localhost pppd[5735]: In file /etc/ppp/peers/ppp0:
        unrecognized option '/dev/modem'
Apr 26 15:34:07 localhost pppd[5710]: sent [LCP ConfReq id=0x1
        <asyncmap 0x0> <magic 0xe0d0ac9c> <pcomp> <accomp>]
Apr 26 15:34:07 localhost pppd[5710]: rcvd [LCP ConfReq id=0x1 <mru 1514>
        <asyncmap 0x0> <auth chap MD5> <magic 0x7659849d> <pcomp> <accomp>
        <mrru 1514> <endpoint [null]>]
Apr 26 15:34:07 localhost pppd[5710]: sent [LCP ConfRej id=0x1 <mrru 1514>]
Apr 26 15:34:07 localhost pppd[5710]: rcvd [LCP ConfAck id=0x1
        <asyncmap 0x0> <magic 0xe0d0ac9c> <pcomp> <accomp>]
Apr 26 15:34:07 localhost pppd[5710]: rcvd [LCP ConfReq id=0x2 <mru 1514>
        <asyncmap 0x0> <auth chap MD5> <magic 0x7659849d> <pcomp> <accomp>]
Apr 26 15:34:07 localhost pppd[5710]: sent [LCP ConfAck id=0x2 <mru 1514>
        <asyncmap 0x0> <auth chap MD5> <magic 0x7659849d> <pcomp> <accomp>]
Apr 26 15:34:07 localhost pppd[5710]: sent [LCP EchoReq id=0x0
        magic=0xe0d0ac9c]
Apr 26 15:34:07 localhost pppd[5710]: rcvd [CHAP Challenge id=0x3
        <85947a0c18c5edfb98d10b1e5f6877e5>, name = "remote.hostname"]
Apr 26 15:34:07 localhost pppd[5710]: sent [CHAP Response id=0x3
        <8ca51a64eb35a454fb99dd6ec19ad17e>,
        name = "[EMAIL PROTECTED]"]
Apr 26 15:34:07 localhost pppd[5710]: rcvd [LCP EchoRep id=0x0
        magic=0x7659849d]
Apr 26 15:34:08 localhost pppd[5710]: rcvd [CHAP Success id=0x3 "\000"]
Apr 26 15:34:08 localhost pppd[5710]: Remote message: ^@
Apr 26 15:34:08 localhost pppd[5710]: sent [IPCP ConfReq id=0x1
        <addr 0.0.0.0> <compress VJ 0f 01>]
Apr 26 15:34:08 localhost kernel: [17179916.660000] PPP BSD Compression
        module registered
Apr 26 15:34:08 localhost pppd[5710]: sent [CCP ConfReq id=0x1
        <deflate 15> <deflate(old#) 15> <bsd v1 15>]
Apr 26 15:34:08 localhost pppd[5710]: rcvd [IPCP ConfReq id=0x4
        <compress VJ 0f 01> <addr 199.aa.bb.cc>]
Apr 26 15:34:08 localhost pppd[5710]: sent [IPCP ConfAck id=0x4
        <compress VJ 0f 01> <addr 199.aa.bb.cc>]
Apr 26 15:34:08 localhost pppd[5710]: rcvd [IPCP ConfNak id=0x1
        <addr 12.xx.yy.zz>]
Apr 26 15:34:08 localhost pppd[5710]: sent [IPCP ConfReq id=0x2
        <addr 12.xx.yy.zz> <compress VJ 0f 01>]
Apr 26 15:34:08 localhost kernel: [17179916.752000] PPP Deflate Compression
        module registered
Apr 26 15:34:08 localhost pppd[5710]: rcvd [LCP ProtRej
        id=0x5 80 fd 01 01 00 0f 1a 04 78 00 18 04 78 00 15 03 2f]
Apr 26 15:34:08 localhost pppd[5710]: rcvd [IPCP ConfAck id=0x2
        <addr 12.xx.yy.zz> <compress VJ 0f 01>]
Apr 26 15:34:08 localhost pppd[5710]: local  IP address 12.xx.yy.zz
Apr 26 15:34:08 localhost pppd[5710]: remote IP address 199.aa.bb.cc
Apr 26 15:34:08 localhost pppd[5710]: Script /etc/ppp/ip-up started
        (pid 5826)
Apr 26 15:34:08 localhost pppd[5710]: Script /etc/ppp/ip-up finished
        (pid 5826), status = 0x0

At this point, the link was up and running.  It was later discovered
that somehow, the peers/ppp0 file was used and /etc/resolv was not set
up, so the peers/worldnet file was copied to peers/ppp0 and the proper
actions were taken in setting up all aspects of the dialup link.

Next, the modem was moved to a fresh Feisty system, and a 'worldnet'
dialup system configured with pppconfig.  It failed to work with 'CHAP
Failure' messages.  No attempt to adjust CHAT scripts, option settings
or peer/worldnet settings did anything to fix it.  Even substituting the
Turbolinux 10 pppd file did not affect the output as it had with Dapper.
Here is the /var/log/syslog output with altered name/ip outputs as
above:

Apr 26 16:06:16 royal kernel: [  169.678925] PPP generic driver version 2.4.2
Apr 26 16:06:16 royal pppd[6010]: pppd 2.4.4 started by root, uid 0
Apr 26 16:06:17 royal chat[6013]: abort on (BUSY)
Apr 26 16:06:17 royal chat[6013]: abort on (NO CARRIER)
Apr 26 16:06:17 royal chat[6013]: abort on (VOICE)
Apr 26 16:06:17 royal chat[6013]: abort on (NO DIALTONE)
Apr 26 16:06:17 royal chat[6013]: abort on (NO DIAL TONE)
Apr 26 16:06:17 royal chat[6013]: abort on (NO ANSWER)
Apr 26 16:06:17 royal chat[6013]: abort on (DELAYED)
Apr 26 16:06:17 royal chat[6013]: send (ATZ^M)
Apr 26 16:06:17 royal chat[6013]: expect (OK)
Apr 26 16:06:17 royal chat[6013]: ATZ^M^M
Apr 26 16:06:17 royal chat[6013]: OK
Apr 26 16:06:17 royal chat[6013]:  -- got it
Apr 26 16:06:17 royal chat[6013]: send (ATDT123-555-1234^M)
Apr 26 16:06:17 royal chat[6013]: expect (CONNECT)
Apr 26 16:06:17 royal chat[6013]: ^M
Apr 26 16:06:35 royal chat[6013]: ATDT123-555-1234^M^M
Apr 26 16:06:35 royal chat[6013]: CONNECT
Apr 26 16:06:35 royal chat[6013]:  -- got it
Apr 26 16:06:35 royal chat[6013]: send (\d)
Apr 26 16:06:36 royal pppd[6010]: Serial connection established.
Apr 26 16:06:36 royal pppd[6010]: Serial connection established.
Apr 26 16:06:36 royal pppd[6010]: using channel 1
Apr 26 16:06:36 royal pppd[6010]: Using interface ppp0
Apr 26 16:06:36 royal pppd[6010]: Connect: ppp0 <--> /dev/ttyS0
Apr 26 16:06:37 royal pppd[6010]: sent [LCP ConfReq id=0x1
        <asyncmap 0x0> <magic 0x5619e4c> <pcomp> <accomp>]
Apr 26 16:06:37 royal pppd[6010]: rcvd [LCP ConfReq id=0x1 <mru 1514>
        <asyncmap 0x0> <auth chap MD5> <magic 0x328cfa50> <pcomp>
        <accomp> <mrru 1514> <endpoint [null]>]
Apr 26 16:06:37 royal pppd[6010]: sent [LCP ConfRej id=0x1 <mrru 1514>]
Apr 26 16:06:37 royal pppd[6010]: rcvd [LCP ConfAck id=0x1
        <asyncmap 0x0> <magic 0x5619e4c> <pcomp> <accomp>]
Apr 26 16:06:37 royal pppd[6010]: rcvd [LCP ConfReq id=0x2 <mru 1514>
        <asyncmap 0x0> <auth chap MD5> <magic 0x328cfa50> <pcomp> <accomp>]
Apr 26 16:06:37 royal pppd[6010]: sent [LCP ConfAck id=0x2 <mru 1514>
        <asyncmap 0x0> <auth chap MD5> <magic 0x328cfa50> <pcomp> <accomp>]
Apr 26 16:06:37 royal pppd[6010]: rcvd [CHAP Challenge id=0x3
        <6b23896f41d62802d071c779a2814a84>, name = "remote.hostname"]
Apr 26 16:06:37 royal pppd[6010]: sent [CHAP Response id=0x3
        <18eafd0f283ea286ce1c0bfb8e1f2f6c>,
        name = "[EMAIL PROTECTED]"]
Apr 26 16:06:37 royal pppd[6010]: rcvd [CHAP Failure id=0x3 ""]
Apr 26 16:06:37 royal pppd[6010]: CHAP authentication failed
Apr 26 16:06:37 royal pppd[6010]: CHAP authentication failed
Apr 26 16:06:37 royal pppd[6010]: sent [LCP TermReq id=0x2
        "Failed to authenticate ourselves to peer"]
Apr 26 16:06:37 royal pppd[6010]: rcvd [LCP TermReq id=0x4]
Apr 26 16:06:37 royal pppd[6010]: sent [LCP TermAck id=0x4]
Apr 26 16:06:39 royal pppd[6010]: Hangup (SIGHUP)
Apr 26 16:06:39 royal pppd[6010]: Modem hangup
Apr 26 16:06:39 royal pppd[6010]: Connection terminated.
Apr 26 16:06:40 royal pppd[6010]: Exit.

** Affects: Ubuntu
     Importance: Undecided
         Status: Unconfirmed

-- 
Dapper & Feisty do not work w/dialup CHAP authentication
https://bugs.launchpad.net/bugs/110852
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