question about burglar alarm dispute (San Francisco Bay Area)

Hi dear all:

We recently got involved with a dispute with a burglar alarm company
(in San Francisco Bay Area), and I hope this is the right place to
post this question.

On our AT&T phone bill last month we noticed that we have a long list
of "automated" long distance phone calls dialing to a area code (408)
phone number. These phone calls happened on daily basis and always
start from 1:43pm and would continue to dial until 2:39pm (for about
one hour, and call every one minute). At first we didn't think of it's
a problem from our burglar alarm company, so we called AT&T and they
put these calls on dispute for us. The next month, we noticed the same
thing again, so we called AT&T again and they told us that it seems
the phone number is a fax/computer type of phone number, they also
asked whether we have some kind of alarm system, so we started to talk
to our alarm company. The alarm company did some investigation, then
got back to us saying that these phone calls were made by the alarm
system for automated testing, as all these calls were never actually
went through, so the modem kept on trying to make those automated
testing calls. However, they did mention that they have another 4-5
customers who also had this problem before and the problem seems to be
related to really old modem (on the residence side, not the modems on
their company side), so they suggested that we should upgrade the
modem in our house (the current one was provided and installed by
them), and they also switched the 408 long distance number to a 1-800
number. They continue to say that we should dispute these phone calls
with AT&T and they are NOT willing to pay for these phone bills
(currently there are about $390 due to

Some questions:

1. From the technical side, who should be really responsible for these
phone calls? I know that we shouldn't, but we also don't know from the
technical side whether AT&T or the alarm company should be responsible
for this $390. Could someone please give us some "technical details"
about how this type of automated dialing system works (for burglar
alarm systems)? If, according to the alarm company, that these
automated dialing (from our home modem) never went through, why would
AT&T has a record on their computer and still charge us?

2. Is there any regulate agency for burglar alarm companies? If this
is the alarm company's fault and they should be responsible for the
$390 bill, other than the BBB (better business bureau), is there any
other places that we could file a complain against this alarm company?