Imac (blue) modem will not connect after OS update

I want to give an old iMac to a friend who needs something for her son to use for email. Connected the machine to my ISP, surfed around a bit to see if it still worked. Did same on three occasions without incident. Updated OS (to OSX 3.9) via connection to isp. Reboot per update requirements and now the iMac will not recognize the phone line. Picks up receiver as soon as the phone jack is plugged in but does not dial, or when it does dial it does not actually connect - phone line gets "hang up and dial ---" message and then silence. Unplug the phone line from the iMac and the dial tone will return but plug it into the iMac and it acts like you picked up the receiver and it will not connect. I promised this kid the computer so he could email his friends. Any thoughts on what's going are appreciated. - Jim

As a suggestion Jim trash the account information and set up as if a brand new ISP account. Did you run Repair Permissions after downloading and installing the update?