When installing the time machine capsule, why does it continue to show a blinking amber light?

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Installing time machine capsule. It continues to show blinking amber light.

I've used cat 5e ethernet capsule to link time machine to WAN port on router and cat 5 ethernet cable from LAN port on capsule to LAN port on router. But the amber light keeps blinking, indicating a problem. The capsule is just a few inches from one Macbook and a few feet to another Macbook.

Also, when I am connected to the capsule the other Macbook can't reach the internet
 

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