This error appears when you try to connect to CRM instance using C# based code (e.g. console application).
Cause: This error could be because of few reasons. I have found it appearing because of network proxy.
Resolution: You could add the proxy exceptions to test the scenario or you could consider unchecking the proxy setting to test the connectivity scenario
You can check whether you are using proxy server by using the following way:
- Go to internet explorer settings
- Select Internet Options
- Go to connection Tab
- Click on LAN settings
- In LAN settings just unchecked the proxy server.