A lot of gamers often come across this issue where the Xbox Live MTU is reported to have failed. If you are getting a similar error then check out the article as it could immensely benefit you.
Here is the thing to keep an eye for. Do you experience the following – You cannot connect to Xbox LIVE. When you perform the Test Live Connection test, the test for MTU displays Failed.
By now it should be apparent to you that your router or the gateway is incompatible with Xbox LIVE, or possibly your router or the gateway has an incorrect MTU setting. Now stop everything you are doing and meticulously double check and make sure this is not so. Ensure for compatibility and MTU settings.