Microsoft Knowledge Base Article 142730 contains the following summary:

This article describes how to create and use a Modemlog.txt file for troubleshooting modem problems using 32-bit communications programs.

The Modemlog.txt file is created by the Windows communications subsystem when a TAPI-enabled communications program establishes a communications session with a modem. Information about the connection is logged sequentially into the Modemlog.txt file as specific events identified by date and time.