Windows 2003 Fax Service

Does this only work with class 1 modems. I have a modem that reports class 1
and 2. When i use a piece of software called Faxserve it sends and recieves
faxes just fine. With the Fax Service though it answers sends the ton and
then drops the connection.

Any ideas on why this would happen? I only have one of the fax softwares
running at a time, just for more information.