/* init ext phy and enable link state int */
        non_ext_phy = ((ext_phy_type == PORT_HW_CFG_XGXS_EXT_PHY_TYPE_DIRECT) ||
-                      (params->loopback_mode == LOOPBACK_XGXS_10) ||
-                      (params->loopback_mode == LOOPBACK_EXT_PHY));
+                      (params->loopback_mode == LOOPBACK_XGXS_10));
 
        if (non_ext_phy ||
            (ext_phy_type == PORT_HW_CFG_XGXS_EXT_PHY_TYPE_BCM8705) ||
            (ext_phy_type == PORT_HW_CFG_XGXS_EXT_PHY_TYPE_BCM8726) ||
-           (ext_phy_type == PORT_HW_CFG_XGXS_EXT_PHY_TYPE_BCM8481)) {
+           (ext_phy_type == PORT_HW_CFG_XGXS_EXT_PHY_TYPE_BCM8481) ||
+           (params->loopback_mode == LOOPBACK_EXT_PHY)) {
                if (params->req_line_speed == SPEED_AUTO_NEG)
                        bnx2x_set_parallel_detection(params, vars->phy_flags);
                bnx2x_init_internal_phy(params, vars);