Missing dial tone of symptom of "not ready to accept dialing" most of time.
Use WWW UI to check device state. It provide more detailed information than just LEDs. But if you line doesn't go 'off hook' despite handset is off the cradle, it's symptom f hardware failure (of either phone or SPA122), miswired cable from phone to SPA122 or incompatible phone at all (a kind of digital phone, not the analog POTS phone).
Fortunately, it's easy to test - use something metal to short two center pins of line's RJ11 connector on SPA112. Shorting of those is safe operation (for you as well as SPA112), just be careful not to damage contacts mechanically. If hook status doesn't change to off-hook when shorted, then SPA112 is broken. Otherwise, something else doesn't work correctly.
See also: SPA112 no dialtone and doesn't detect off-hook