When your Cisco IP phone cannot connect to the Internet the mute button turns red. The only other time the mute button is red is when you're on a call and press the mute button or if the phone is in the boot up process. If you're not on a call and cannot turn off the mute button by pressing it, your phone isn't connecting to the Internet.
If your phone is powered by a separate wall adapter, check to make sure the Ethernet cable is plugged securely into the correct jack on the back of the phone.
If your phone is powered by the Ethernet cable (you don't have a separate power cord) then there is a connectivity issue between the POE switch or POE Injector. The connectivity issue will need to be resolved before the telephone will come back online.
More often than not, rebooting your network connectivity will resolve issues with making outbound calls.
Try rebooting your modem and router (Show me how)
You may also need to reboot any switches you have in your network. Switches are normally long, thin devices with numerous ethernet cables plugged into them. If you don't know what a switch is, you may not have one.
If rebooting your modem and router (and any switches) did not fix the issue, try rebooting your PBX.