Outlook can't connect through a proxy that's set up by using a file://–based PAC file
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Applies to: Exchange OnlineMicrosoft Outlook 2013Microsoft Outlook 2010Microsoft Office Outlook 2007More
Assume that you have a proxy that's set up by using a file://–based proxy auto-configuration (PAC) file. In this situation, you can't use Outlook Anywhere to connect through this proxy to an on-premises Exchange 2013 server, an on-premises Exchange 2010 server, or Exchange Online.
WinHTTP does not support PAC URLs that use a file:// prefix. Therefore, when Outlook connects by using WinHTTP, it can't use the PAC file if the URL starts with file://. This behavior is by design.
To work around this issue, use one of the following methods.
Set up an http://–based PAC file, select the Use automatic configuration script option in Internet Explorer, and then specify the URL of the PAC file in the Address box.
Deploy Web Proxy Automatic Discovery (WPAD), and then select the Automatically detect settings option in Internet Explorer.