Abstract: An apparatus connected to a telephone line automatically detects the presence of modulated data (i.e. modem data, modem carrier signal, facsimile data and the like) that is being sent or received over the telephone line. The apparatus is used in conjunction with a consumer premises equipment (CPE) such as a telephone or the like, and detects a modem signal on the telephone line regardless if the CPE is in an on-hook or off-hook condition. If modem signals are present on the telephone line, the apparatus of the present invention will automatically prevent the CPE from seizing the telephone line (i.e. go off-hook). In addition, an audible or visual indication is provided to the user. For example, a visible "modem-in-use" indicator, such as a liquid crystal display (LCD) or an illuminated LED, or an audible signal such as a "beep" tone, speech signals or the actual modem signal, may be presented to the CPE attempting to go off-hook.