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New SBS 2011 server having issues with Fax

I just finished a SBS2003 to SBS2011 swing migration, everything is working great except for FAXing.

When sending a fax from the server or from a workstation the modem dials, negotiates with the fax machine on the other end of the line, transmits for a few seconds and then disconnects with "Fatal Error". I have tried a number of things which I will detail in a moment.

For the first day faxing seemed to work, then it started giving errors. Upon furter investigation we found that some of our outbound faxes had issues that we didn't know about. Sending the fax 4 times to one person, etc.

Here are the errors we get
From the Fax Log
Error Desciption: Unknown fatal error
Error Code: 0x0000000c

From the System Event logs:
Log Name: Application
Source: Microsoft Fax
Date: 8/20/2012 10:35:36 AM
Event ID: 32027
Task Category: Outbound
Level: Error
Keywords: Classic
User: N/A
Computer: BOONE-SERVER.boone.local
An error was encountered while sending a fax. This fax will not be sent, because the maximum number of retries has been exhausted. If you restart the transmission and difficulties persist, please verify that the phone line, fax sending device, and fax receiving device are working properly. Sender: Administrator. Billing code: . Sender company: Boone Insurance Associates. Sender dept: . Device name: U.S. Robotics 56K FAX EXT PnP. Job ID: 0x0201cd7ef9f098e1. User name: BOONE\administrator.
Please check the activity log for further details of this event.

Server Details
Dell T110 II
SBS 2011 Standard
16GB of RAM
Raid 10 with 6x300GB 10K drives
Everything is fully patched (OS, Exchange, Sharepoint)

Fax routing is set up to go to a folder on the data drive and to a sharepoint library.

Here is what I have tried
- Uninstalling the Fax Server role from the server and then reinstalling it.
- Running the "Repair the Fax service" wizard from the SBS console
- A new modem from a different manufacture, same results.
Both Modems list 2008R2 compatibility and searches reveal other are using them successfully with SBS2011:
MultiTech - MT9234ZBA-NAM
US Robotics 5686G

- Adjusted settings on the modem properties
Port Speed: 9600 - No difference
Error Correction: Turned off - No difference

- Have tried sending to multiple fax machines.
- When I changed folder permissions on the server:
c:\ProgramData\Microsoft\WIndows NT\MSFax
So that everyone has full access, now 50% of faxes will go out when sending from the server itself. (I have not had any of the desktop user try.)

Next I tried to find a patern thinking it might be an issue with specific cover pages, but it doesn't make a difference for each cover page or even if there is a cover page.

I thought it might be a line issue, but then I can't rectify in my mind why the SBS2003 server (using an internal modem) and a fax machine work fine on the exact same line.

Any help would be greatly appreciated.
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1 Solution
I would change the port speed to as fast as the modem interface can cope with,  at 9.6k it is not fast enough for fax transmission.
AmbientITAuthor Commented:
I had read in numerous places that one thing to try with this error code is changing the speed to see if that helps. Since it didn't help I put it back to the original value.
AmbientITAuthor Commented:
Never could get this to work, ended up installing GFI FaxMaker and it works great.
AmbientITAuthor Commented:
After spending hours trying to get this resolved we ended up going with a 3rd party product rather than spending more time on this.

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