UPDATE!!!

# Install Intel Modem Drivers & Set Permissions
su -c "chmod a+rw /dev/Modem"
su -c "chmod a+rw /dev/ttyS2"
cd /lib/modules/2.4.20-xfs/kernel/drivers/char
insmod -f 536epcore.o
insmod -f 536ep.o

Must use su -c to get Root and chmod .

I tried setting 1777 for /dev/modem from an terminal,
but after rebooting - the sticky bit was gone.

The above take's care of the problem.

Good Luck ...