WPAD and Proxy Auth Cause Exchange HCW to Fail

4th of May, 2016 / / No Comments

A recent conversation with a colleague reminded me of an issue I’ve faced a number of times (and forgotten to blog about) when running the Exchange Hybrid Configuration Wizard (HCW) on Exchange 2010 or 2013 in an environment where Web Proxy Autodiscovery Protocol (WPAD) is used.

The Problem

The most common scenario where I’ve seen this come into play is along the lines of this:

  1. WPAD is used to distribute Proxy.PAC to client machines
  2. Customer permits direct connection from Exchange servers to Internet
  3. From an elevated command prompt, run “netsh winhttp reset proxy” to ensure a direct connection
  4. Change Internet Options settings from “Automatically detect settings” to “Disabled”
  5. Browse to a site restricted by the proxy to confirm proxy bypass is working
  6. Can connect to Exchange Online using Remote PowerShell
  7. Run the HCW but it fails with the following error in the logs:
    ERROR : System.Management.Automation.RemoteException:
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