works fine (and you are authenticated), check the /var/log/messages for entries: Jun 12 01:40:44 hostname pppd[569]: MSCHAP-v2 peer authentication succeeded for <username> Jun 12 01:40:44 hostname pppd[569]: MPPE 128 bit, stateless compression enabled NOTE: If you don't have 'strong encryption pack' for Windows, it will report "MPPE 40 bit, stateless compression enabled".