Ok, so the motorola guids say set your Mac to use DHCP, so do that.
Now when you plug in your Mac to the Motorola device, if the link doesn't go active in Network Settings, and the link light doesn't light up on the Motorola devce, then something is broken.
Try a different cable. Try a different computer with the Motorola port, try the Mac with a different piece if networking equipment i.e. plug it directly into the AEBS.
That should hopefully help you identify the dodgy piece of equipment. It would make sense if it was the Ethernet port on the Motorola device, as that would explain the AEBS showing a dropped connection
Ok, so I tried changing to DHCP in Network Preferences but that did not get the internet running through Ethernet. Later, I was trying to change my modem to DHCP. I think the only way to do that is get out the Modem installation CD from AT&T and reinstall it but this time using DHCP. When it got to the step where it wanted to test the modem, it failed the test and said I did not have everything connected properly... but I do... I have checked everything.
So this makes me think that you are right that the modem could have a damaged Ethernet port. But I was having the same problem with my old modem with the AEBS. Maybe I could have a damaged phone line wall jack or something (where the DSL filter is connected to). Thanks for your help!
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Thanks