I am running a SBS 2008 server. It's setup as the domain controller for the network.

After a reboot, the Telephony service (and all services that depend on it) refuses to start under the Network Service account. The error given is:

Error 1297: A privilege that the service requires to function properly does not exist in the service account configuration. You may use the Services Microsoft Management Console (MMC) snap-in (services.msc) and the Local Security Settings MMC snap-in (secpol.msc) to view the service configuration and the account configuration.

This has caused all the network services not to be accessible e.g. terminal services, VPN (RRAS), SQL Server instances. The SSH daemon I have running on the box will accept connections only from localhost, but won't respond on the network.

After searching around, the only advice I could find was to grant the Network Service account these permissions:

1. Adjust memory quotas for a process
2. Replace a process level token

I set those permissions on both the Default Domain Policy and the Default Domain Controller Policy, but it seemingly had no effect.

Most of the services will start if I change them to run under the Local System account, but that didn't make them accessible on the network.

I even tried removing the Routing and Remote Access Services feature, rebooting and reinstalling it, but the issue remains.

Any ideas?