Hi Guys,
Thanks for your ideas.
I did try disabling window scaling (net.ipv4.tcp_window_scaling=0), forceably limiting the window to max 64K. This did reduce the frequency of dropouts which seems to confirm my theory. Those that remain are probably actually due to line noise. Of course, the setting affects all network interfaces.
I do not have call waiting. I tried reducing the MTU below 1500 once before. It seemed to generally make things worse. Packet fragmentation problems perhaps?
I will look into some better ftp sofware.
Thanks again!
-Shawn