He does manage to connect with aol. So the problem is with internet explorer.
If his modem wouln't function correctly, he wouln't be able to connect to aol.
So I am either guessing the security on explorer is set too high or it's not configured correctly.
try opening internet explorer, tools, internet options, security, and make sure all 4 options (internet, local internet, sensible cite...) make sure all 4 are set to default especially the 3rd one, cites of confidence or something)
if it doesn't work, then try installing internet explorer again.
check something and tell me what it gives you, right click on my computer, then go to properties, then to hardware manager, tell me if you see your modem in that list, make sure there isn't a yellow ! besides it or a ? or an X.