I once had this issue on an old PC. Modems did not reply, but null modem connection to another PC worked fine. It then started to work when I removed my Gravis Ultra Sound ACE for some reason I never found. The GUS still works fine in another PC.

Maybe you should try removing any hardware you don't need for a modem connection and see if it works then.

Did you set the proper handshake?

The laptop I used had no additional hardware attached and was running in DOS 6.22.

As for the handshake, I don't follow. I thought the handshake process was done on before data could pass between modems, not before the modem would feed back text to the local terminal.

I did some tests involving a live phone line to test if the modems would dial and throw tones. My USR would not make any sound resembling a tone or a pulse, so I will call it dead. The Best Data did dial and throw tones on pickup. Of note, this modem is listed as a V.90 compliant modem, as is the internal modem in the previously mentioned "other computer". When a connection is established with the internal modem answering (direct phone line connection with carrier detect disabled on both), it reports a connection speed of only 33600. I attribute this to the lack of a proper init string due to the obscurity of the brand and its documentation. With the external modem answering, the handshake (tonal) process seems to hit a snag toward the end and it drops the line, leaving the internal modem with a high pitched tone.

I have a newer, tested modem on the way to which I will compare to these and probably find exactly what I think I already know: There was a reason these were sitting on a shelf in a thrift store for $3 each. Hopefully this one I payed the same for both of the others will do what I need it to do.

***UPDATE***

The 2 modems I was dealing with are officially dead. I received a Creative Modem Blaster and it responds as I thought it should. After playing around with it, I attempted to make a direct connection between it and the other computer modem (no phone line, no dial tone, just "&c0" on each end). They appear to be handshaking ok(I think), although I am having an issue that I can't seem to trace. Whenever I connect to the other computer from the Modem Blaster, the other computer's terminal seems to show the message "CONNECT 33600" followed by "NO CARRIER" and then disconnects. The Modem Blaster's terminal shows the same "CONNECT 33600", but is followed by either what seems to be garbage (albeit, the same garbage every time) or a repeating alternating letter "E"'s and a up-side down question marks for a little over 80 characters or so, followed by disconnection, but the "NO CARRIER" message takes a bit to display.

Connecting the other way will give some garbage on the other computer's side, but will stay connected and typing in either terminal will display the other's text as typed. After disabling V.90, the audible tone seems to change and the connection is a lot smoother, although there is still a bit of (different)garbage.

I assume that by displaying the same "garbage" each time, some sort of message is being sent on connection, although I can't seem to figure out what it is. I thought it might be some sort of error correction negotiation, but with both modems' error correction options turned off, it still does this.

Does this ring a bell?