Had this very same problem using a 2wire brand att modem/router. Was able to fix it by going to advanced settings and chaning connection type from PPPoe to Direct IP (DHCP or Static).
They are dogs to bridge.
Here is one lot of instructions.
To enable bridging:
1. go to home/mdc or 10.0.0.138/mdc
2. go to “Configure” under “Broadband Link” on the left hand panel.
3. Change “Atm Encapsulation” to a type that supports bridged mode (bridged llc or bridged vc-mux).
4. Change “Connection Type” to “Direct IP” and submit.
5. go to “Configure Services” under Advanced on the left hand panel.
6. uncheck “enable routing” and submit
7. gateway should now be in bridged mode. In this mode tr69 and dhcp do not work. The gateway will have the ip address of the lan interface, ie 10.0.0.138 can be used to manage the unit.
Here is another.
1. In your browser, go to 10.0.0.138/mdc
2. From the left panel select Broadband Link > Configure.
3. Change ATM Circuit Identifier > VPI to ‘8’ instead of ‘0’.
4. Change ATM Encapsulation to ‘Bridged Bridged VC-Mux’.
5. Change ATM PVC Search to ‘Disabled’.
6. Change Connection Type to ‘Direct IP’, and hit Submit at the bottom of the page.
7. From the left panel select Advanced > Configure Services.
8. Deselect Enable Routing, and hit Submit. The 2Wire is now in bridged mode.