I found the solution, you have to hook the Alcatel modem into the router. Check out this link:
http://www.ithell.com/Letters/Joe_Diaz/body_joe_diaz.html
I have the exact same problem as uriel. My set up is:
Linksys NIC -> Linksys 4 port hub. The Alcatel modem is also plugged into the hub. This works perfectly. What I want to do is replace the Alcatel modem with the Linksys 1-port router.
I have configured everything as per instructions...
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