Couple of suggestions:
1. If you want to telnet into the auto dialout application, you need to make sure ppp is set to disabled. This setting is on the PPP page of the web management interface.
2. If you have confirmed that ppp is disabled and the device has been restarted, when you telnet to port 5000 type the following command (even if you don’t see the characters printed to your terminal screen):
ATE1V1Q
You should see an OK response printed to your screen, and you should also start seeing characters in your terminal window as you type them.