Remote Desktop cannot Connect to the VDI-based remote computer after enabling Microsoft RemoteFX 3D Video Adapter

After installing the RemoteFX 3D Video Adapter on a Virtual Desktop Infrastructure (VDI)-based physical machine or a virtual machine that is hosted on a Hyper-V server, when you try to connect to the machine using Remote Desktop connection, it may fail. Additionally, you may receive the error message that is similar to the following:

Remote Desktop can’t connect to the remote computer for one of these reasons:

1) Remote access to the server is not enabled
2) The remote computer is turned off
3) The remote computer is not available on the network

Make sure the remote computer is turned on and connected to the network, and that remote access is enabled.

You may also receive the following error in the Windows Event Log:

Log Name: Microsoft-Windows-TerminalServices-LocalSessionManager/Operational
Source:       Microsoft-Windows-TerminalServices-LocalSessionManager
Date:          <Date><Time>
Event ID:    17
Level:         Error
User:          SYSTEM
Remote Desktop Service start failed. The relevant status code was 0x800706b5.

Note that you can connect to the computer using RDP if you remove the RemoteFX 3D Video Adapter from the VM.
With the release of Service Pack 1 for Windows 7 and Windows Server 2008 R2, a new Windows Firewall rule is added for RemoteFX. This problem occurs if RemoteFX Windows Firewall rule is not enabled.

For more information on Microsoft RemoteFX, visit the following Microsoft Web site:

To resolve the problem, you must enable the RemoteFX Windows Firewall rule manually.

To enable the RemoteFX rule by using Windows Firewall with Advanced Security
  1. Click the Start button , and then click Control Panel.
  2. In the Control Panel windows click Windows Firewall.
  3. In the left pane, click Allow a program or feature through Windows Firewall.
  4. Click Change settings. If you're prompted for an administrator password or confirmation, type the password or provide confirmation.
  5. Under Allowed programs and features, select the check box next to Remote Desktop - RemoteFX, and then use the check boxes in the columns to select the network location types you want to allow communication on.
  6. Click OK.
Alternatively, if you enable Remote Desktop by using the System properties window, the rule is enabled automatically.
  1. Click the Start button, and then click Control Panel.
  2. Click on System icon.
  3. Under Control Panel Home, click Remote settings.
  4. Click the Remote tab. Under Remote Desktop, Select Don’t allow connections to this computer and the click Apply
  5. Now select either option depending on your security requirements:
    • Allow connections from computers from computers running any version of Remote Desktop (less secure)
    • Allow connections from computers only from computers running Remote Desktop with Network Level Authentication (more secure)
  6. Click on Apply and the OK.
More information
You must enable the RemoteFX Windows Firewall rule manually if you enable Remote Desktop of VDI machine using either of the methods:
  1. Using WMI command:
    wmic rdtoggle where (AllowTSConnections=0) call SetAllowTSConnections 1
  2. Toggling the registry:
    REG.exe ADD "HKLM\SYSTEM\CurrentControlSet\Control\Terminal Server" /v fDenyTSConnections /t REG_DWORD /d 0
  3. Enabling firewall exceptions for Remote desktop using netsh command or Windows Firewall APIs:
    netsh advfirewall firewall set rule group="remote desktop" new enable=Yes
  4. Using PowerShell script provided on Microsoft TechNet Script Center to configure VDI desktops.
  5. Upgrading to Windows 7 with SP1 on a virtual desktop that already had Remote Desktop enabled.