A physical layer transceiver (PHY) ability configuration system includes a peer computing device having a first communication subsystem that includes a first PHY device coupled to a first port. They system also includes a networking device having a second communication subsystem that includes a second PHY device and that is configured to operate in a plurality of modes and a second port that is coupled to the second PHY device. The networking device determines, in response to a cable coupling the first port and the second port while the second PHY device is configured to operate in a first mode of the plurality of modes, that a link is not detected at the second port. The networking device changes the first mode to a second mode of the plurality of modes, and detects the establishment of the link between the first port and the second port.