Using the attached picture as a reference, connect your Level One router to your Telekom router through the switch ports. Do not use the phone line or the DSL or WAN ports, only the LAN or switch ports between the 2 devices. The blue line between the devices shows how you should connect it. I know the Level One in the image is not your device, but it should be similiar on the back for you to get the idea of how to hook it up.
Try just doing that and see if it works. To use the wireless, you will need to make sure it is enabled on the Level One, and that you have setup security like WPA2.
See if this works, if not you may need to turn off wireless on the Telekom router if it has it, and turn off the DHCP feature on your Level One Router. Try turning off the DHCP feature first. The reson for this is because the IP address of your Telekom router is the gateway, and not your LevelOne. If the level one sends out the IP information to the PC, then it will say that its the gateway, but this is wrong cause the Telekom router is the gateway.
If you do the above, you are basically bypassing your layer 3 Router feature and making it a layer 2 switch and wireless access point.
If you still need help, please give me some more details on what equipment you have and how you are connected, like the type of Telekom router, if you have DSL or Cable, and if you have ISDN for the phone lines.