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Gaining & Losing Connectivity on LAN

I have a problem! On my LAN at work we have abour 40 XP Pro PCs, a Windows 2003 Server, a Windows 2000 Server, and a Sco UNIX Server. All of this is connected by three NETGEAR hubs, a Linksys BEFSX41 router, and a Linksys WAP54G Wireless Access Point for a couple laptops. A T1 provides internet connectivity. We also will have up to 6 VPNs accessing the network for Sales employees who are at their homes. The issue is that periodically (which can be 20 minutes or a few hours), all of the client PCs show on their desktop that they are losing connectivity and then gaining connectivity, back and forth. In the system tray of all client PCs is the tray icon for their NIC cards, which a balloon pops up and shows "Local Area Connection is Connected" then a red X over the icon. This flashes back and forth about every second. The only way I have been able to solve this is by shutting down all PCs and networking equipment and restarting it all. This "band-aid's" the problem for anywhere from 20 minutes to a few hours.  This past riday I installed a new router and replaced one of the 24 port hubs in an attempt to solve the issue. 3 hours later it occured again and I fixed it by shutting down and restarting everything. I am at a loss. Please help!
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The hubs are switches (sorry). All networking equipment are backed by large APCs. Thasnks for your response.
When the issue was occuring, one of the hubs had all of it's LEDs flashing at the same time, while the other ones weren't flashing like that.  I went out and replaced that switch on Friday, 8/20/04 at 11am. The issue came about once more at 1:15pm that same day. Once again I shut down and restarted the networking hardware and the PCs. Since then we have had a skeleton crew working over the weekend and the issue has yet to come back since 1pm Friday. I am concerned that perhaps it is the router being overworked? Is there a way to check that?
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As a test, you might want to remove the "hub" with the flashing LED out of the picture...    

If you can afford it... remove the hub and/or turn off all machines on that hub.  I have a feeling one particular device on that hub is having a lot of problems and/or infected with some kind of virus and/or trojan that is trying to broadcast and infect others.  This happened to one of my client.   As soon as I figured out which workstation was causint the trouble and removed it from the network, everything works.

If it were caused by a virus, however, then you might have multiple machines that's doing it.  From the looks of things, if that's the case, at least it's still in the same hub.

I am not so sure if the changing of the NIC speed is a good idea, however.  If anything, slowing down the speed on some of the machines might help the traffic congestion.

- Info
I solved the issue. I had the network daisy-chaining. That seems to have solved the issue. Thanks!
What do you mean about daisy chaining?  I am having a similar prom on a MAC network.
Switch C plugs into Switch B, plugs into Switch A...... In this case Switch A would be tier 1, B would be tier 2, C would be tier 3, so on...

As opposed to Switch B and C plugging directly into A. A would be considered tier one. B and C would be considered tier 2.

Ultimately you want one tier. That's why they sell those huge hp or Cisco modular switches that are physicall and logically one tier.
Thanks, I'll see if it applies for me.