DHCP setup on Time Capsule

Your ADSL router distributes IP addresses in a specific range. The Time Capsule is usually configured to use a range beginning with 10.0.1.2. Most likely, you need to change the Time Capsule's range to match that of the DSL router which is most likely starts at 192.168.0.2.

Not sure. I believe DHCP only.

DHCP Only is used only if the ISP is providing a bank of fixed IP addresses for you to use.....along with DNS numbers, Subnet mask and other boring stuff.

The first IP address would be used to establish an Internet connection and the other IP addresses provided by the ISP would be used to distribute to other devices.

This type of setup is extremely rare these days.

Has your ISP provided you with a series of fixed IP addresses that you must use? If no....then you would never use the DHCP Only setting.

DHCP Only is used only if the ISP is providing a bank of fixed IP addresses for you to use.....along with DNS numbers, Subnet mask and other boring stuff.

The first IP address would be used to establish an Internet connection and the other IP addresses provided by the ISP would be used to distribute to other devices.

This type of setup is extremely rare these days.

Has your ISP provided you with a series of fixed IP addresses that you must use? If no....then you would never use the DHCP Only setting.

Why is it not working with the adsl modem working as router? If you plug the IP phone into a bridged TC it should pass an IP to the phone from the modem as usual. I don't understand why that is not working. Is the TC in bridge or actually in join a wireless network mode? There should be an ethernet cable from modem to the TC in bridge.

I can explain how to setup with static IP and use DHCP as I do use it. What Bob posted is correct but there is a sneaky way around the problem and it works very well to use the TC as a secondary dhcp server without causing double NAT. But I still need to understand what you are trying to achieve that isn't working now.

The TC itself has an IP address even in bridge though.. which is derived from the main router.. similarly any other device you plug into the TC must get an IP from the main router.. the fact that it is bridged is irrelevant..

Can you please completely remove the TC and plug the ip phone directly into the EOP adapter. Does it get an IP address?? If not then simply changing the mode of operation of the TC still won't work. If it does work it must work with the TC in place just as well as without it.

TP Link TD-W8960N ADSL2+ which is plugged into a Huawei Echo Life HG612 VDSL2

This is really not good.

The 8960N is hardly a fit router. Why do you need it setup this way. If the HG612 is a pure modem.. then I recommend you swap the TC to act as the main router.

Connect the 8960N in wan bypass at the other end of the power line connectors and simply plug the IP phone into that.

At least buy a real router to replace the 8960N which is an adsl modem router which barely functions as a WAN router.

I don't have a static IP address from BT (my ISP).

Then, you would never ever normally use the setting of DHCP Only.

I see that LaPastenague has also replied and offered some good advice here.

You can buy any router that has an ethernet WAN port. Sometimes called a cable router. ie there is no inbuilt modem.

As long as the HuaWei is a pure modem you have no problem with double NAT.

You could buy another apple router.

The ones I recommend to people are cheap and have access to third party firmware. So look at the lists for dd-wrt, gargoyle, openwrt. I am not allowed to give you a URL. A good cheap model is TP-Link WDR3600 Around $80 here. The 4300 is only slightly better.

The Netgear WNDRMAC are excellent models.. either v1 or v2 or WNDR3800 although they have all finished production and you will need to hunt ebay dealers etc.

If you want new then Netgear R7000 or the Asus RT-AC68U are really excellent. For the same price you can get new Airport Extreme which is design wise electronics almost the same.. just the other brands milk them for all their worth.

A second hand Gen5 AE is also a very good router for simple easy install if you need no more functionality.

Your TC should be in bridge mode.. so

DHCP will be handled by the main router not the TC.