Recently moved into an apartment, and since I have a desktop, a laptop, and a 360, I need a router. First one I grabbed worked just fine for about a day. At some point that night the internet cut out and I noticed that everything said 'Local only' on the networks. I reset the modem, router, and computers and I'd still be stuck at Local only. I left things unplugged for an extended period, and when it came back I got internet for maybe a half hour before it was gone again.
Called the cable company (Cox) and have since determined that the problem is not on their end. If the router's not in the equation, everything's gravy. Both desktop and laptop work perfectly fine if going directly to the modem.
Returned the router (Netgear) and the new one (Linksys) is having the same issue. Back home, where we had a Netgear router, my desktop was working perfectly fine with the setup until about a week ago. We were having similar issues there, but prepping for the move distracted me. The issues disappeared when I left, so I'm pretty sure the desktop is to blame. Confusing part is that it did work for a few months with the router at home without issue.
Also had the desktop at my buddy's place for a few days (Linksys router I believe, and this was shortly before any problems cropped up) and had no issues.
tldr: ~3 month old desktop (64 bit Vista, issue?) worked fine with routers for 2+ months, and has since decided not to.
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Failing that, clone your PC's MAC address to the router's WAN port. Then bitch at Cox some more.
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Also, cloning the MAC address to the router's WAN port is about 2-3 steps beyond my technical expertise, after which I wouldn't know what to bitch to Cox about.
Normally, unplugging the cablemodem will unlock MAC addresses, even on systems that do some sort of minimal binding. It might not work in all circumstances, but I'd suspect that the lock shouldn't ever last longer than the DHCP lease lasts. Hard to say what they're doing on their end.
I mean, it's technically feasible to prevent customers from hooking up routers to share connections (say, because you want them to use your router equipment, or you want to charge them extra to hook up multiple computers), by just setting up their end to not give DHCP leases out to MAC address prefixes from companies that don't make computers (e.g. Cisco, Linksys, D-Link). If the DHCP server sees a request from a MAC starting from, say, 00:04:5A, just don't give out a lease. I've never heard of anyone actually doing this though. I don't imagine that's what happening here (it certainly wasn't Cox's policy last time I was one of their customers).
It's not impossible you might have two bad routers. Might be worthwhile to take the router over to your friend's place and test it. Your router or PC configuration are the current prime suspects though. If it really does work with the router out, it's probably quite honest for Cox to say it's not them.
Recheck your router and PC network configurations. Maybe you left the PC configured for static IP's, or something like that. Also, when you start, reset the modem and router. Unplug everything, then hook up the modem and power that on. Let it completely fnish booting, then start up your router and let that finish. Last, power up your PC. Sometimes, network equipment can get caught in loops if stuff is still booting up when it tries to handshake.