I was having the same problem too. After doing a search online I found out that the most likely cause is that you just grabbed a regular phone cord and plugged it in. The most common phone cords today, the RJ-14, is specifically made for to handle two phone lines. This is not a problem of course because it also handles a one phone line system just the same. The issue is the HP C7280 is that when you connect that cord, it reads as if there is two phone lines, which is not a problem of course unless you only have one phone line. This causes it to register the second phone line as off the hook and therefore it would not proceed as a result. The solution is to buy a "standard" RJ-11 phone cord. Which probably came with your printer and was just misplaced. Hope that helps... a year and 3 months later.
Source: Research and the link that follows and more research...
Link: http://forums.comcast.com/t5/General-Hardware-and-Software/HP-Fax-ISSUE-Solved/td-p/721818
Chances are your phone line is not a dedicated outgoing data transmission line : result of the phone companies keeping tabs on their property and its usage. if you are using a regular phone line, you have to call for the phone co. to add the data transmit feature.
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