Microsoft Edge Enterprise — Intermittent Blue Coat Proxy Authentication Prompt

I can confirm that the proxy is currently advertising Basic Authentication, as verified by our proxy administrator. There are plans to transition to NTLM/Kerberos in the future.

One possibility I have been investigating is whether background activity in Edge, such as cloud synchronisation or other telemetry services, could be triggering proxy authentication challenges even when the browser is idle.

I ran some network traces and noticed several Edge telemetry requests, including requests to *.edge.microsoft.com, receiving HTTP 407 (Proxy Authentication Required) responses. Based on these findings, I temporarily configured proxy bypasses for the relevant endpoints, particularly *.edge.microsoft.com, and have not encountered the authentication popup since. However, I need to monitor this for a longer period before concluding that it has resolved the issue.

From your experience, could requests to these endpoints trigger intermittent authentication prompts when they are not handled correctly by the proxy's authentication configuration? Is bypassing specific endpoints a common and appropriate workaround in such scenarios, or would it be better to address the underlying authentication behaviour on the Blue Coat side?

Unfortunately, I cannot share the original network traces because of the classified nature of our operations. However, I may be able to provide sanitised or redacted logs if they would help with further analysis.

I would appreciate any insights or recommendations from anyone who has encountered similar behaviour with Microsoft Edge and Blue Coat proxies.