Hey everyone thanks for all the feedback. I plugged the phone directly into the extension sockets. The dangly filter--microfilter--is plugged into the master socket so I can connect the router.
Can I re-emphasise this part as a major problem?
When you have a modem connected to a "dangly filter" on any socket (master or extension), then any phone connected to another socket (master or extension)
must also use a filter. Any other kind of device - wired phone, cordless phone, sky box, dial-up modem - always needs a filter as well.
The only time you can plug ordinary phones in without a dangly filter is when the master socket has an extra faceplate (like the MK3) that automatically filters all the extensions.
Technical details:
Ironically, the hardware in the filter is NOT used for the modem signal, only for the voice portion.
When you use a dangly filter for the modem, it isn't using the filter hardware itself; you are only using it to get the right shape of socket to access the unfiltered line.
When you use a dangly filter for the phone, it does make use of the filter hardware.