Step 2: Check the voltage
Inside the terminal box are three brass terminals. One will have a red wire. It is the terminal on the left. One will have a green wire. It is the terminal on the right. The third terminal is a ground wire connection.
Set your voltmeter for the range that can read 50 volts DC. Attach the leads to the terminals for the red and green wires. If all is working well with the phone company's lines, the meter will give a reading of about 50 volts, give or take a couple of volts. If there is a problem with the phone company's line the voltage reading will often be less than one volt. When the phone company representative tells you it will be very expensive for you if the problem is in your lines inside the house, just say, "I put my voltmeter on the terminals in the box where your lines enter my house. There should be about 50 volts DC at the terminals, but there was less than one volt." The representative's next words will be something like, "We will send someone right out."
Some newer terminal boxes have a modular plug receptacle rather than brass terminals you can access. Simply plug a phone into the modular plug receptacle and check for a dial tone.