The simple answer is:

Often, modems get into a state where they ignore control characters or 
"break" commands. This is especially true with the modems in Ascend 
products, since we only send init strings to them when there is an 
INCOMING call. So, How to fix? 

 type AT&F
 type ATZ
 then your control-c should work.
If it doesn't, here's one more command to try
 atz! [that's a BANG, or exclamation point for you normal 
folks out there]
That does a "hardware reset" of the datapump.


More Info:

There are occasions where the modem gets in a state where it ignores 
the break command; also there's a big difference between a local break 
and a remote break.

When you have a modem "open" in the terminal server, Ctrl-C three times
 is the method to go back to the terminal server; then type "close" to close
 the session.  BUT... there are times when the modem ignores the Ctrl-c 
[for example, if the flow-control gets set to out of band {RTS/CTS} instead 
of in-band {Xon/Xoff} then the modem ignores Ctrl characters in the data stream.  
If the modem stops listening to Ctrl characters, you can usually reset the modem 
by issuing an AT&F, an ATZ, an ATZ!  or a combination of the three, then 
try the CTRL-C 3X.