According to this KB Article
Error C00D07C9
You may be connected to a Public-level network.
Resolution
This error can appear when the computer that Zune is installed on is connected to a Public network location. The Public network location blocks certain programs and services from running to help protect your computer from unauthorized access while you're connected to a network in a public place. If you're connected to a public network and Windows Firewall is turned on, some programs or services might ask you to allow them to communicate through the firewall so that they work properly.
If your computer is connected to a Public network this behavior is normal and you need to allow the Zune program and the Zune Wireless Configuration Service to communicate through your firewall. If your computer is actually connected to a network at work or at home (or a network you trust) then:
- Open the Network and Sharing Center by clicking the Start button, and then clicking Control Panel. In the Search box, type "network", and then click Network and Sharing Center.
- Click Public network and then click Work network or Home network.