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Issue with circuit -Layer 2 works, Layer 3 doesn't

I have a problem I have seen before and want to understand why it is happening.  We had a circuit taking hits.  The circuit appears to be working. We can do a "show cdp neighbor" and can see the far side. However, we can't ping the other side.  The circuit is a ATT T1 Point to Point.  What be happening with the carrier that this happens?

Thanks

Adam

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Re: Issue with circuit -Layer 2 works, Layer 3 doesn't

CDP works on layer 2. how bout doing a ping and traceroute to the remote side? also try troubleshooting using show ip route on your local router. what does the output shows?

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