Hi after searching a long time finally found the solution here on Activision tech support.
If you are having a problem connecting to an online game game, check the following:
•Disable any firewall or security features within your router •Set port forwarding on your router to the IP address of your Playstation 3. This game uses ports 3074, 3075(UDP) and ports 80, 443, 5223(TCP).
- Place your Playstation 3 into the DMZ of your router.
- If both fail, disconnect your router and try the game. If it works regularly at this point something about your router may not be completely compatible with the specific needs of this game. Check with your router manufacturer for additional steps that may need to be done to resolve the issue you are having.
NOTE: If setting port forwarding or DMZ helps your connection issue, you may want to assign your Playstation 3 a static IP address within your home network. This can help to ensure that the configurations you made do not need to done again.
NOTE: Many broadband internet modems are coming with routing capabilities built in. Please contact your internet service provider to determine if your internet modem has an integrated router. If it does, they should be able to assist you with the steps above for setting up your router.
You can find more information on configuring shared connections and forwarding ports for your specific router at http://www.portforward.com. Please be aware that like a firewall we cannot actively support using shared connections to play online.
•Once you have verified that your network setup is not the cause of the issue you can try the following.
- Try connecting to a different server. Some servers may have other players connected to them that you do not have an optimal connection with. To do so back out to the main menu and select Multiplayer and then attempt to join a game.
No wonder this is Kart Racing for adults. It's WAYYY too complicated to set up for kids. If you are still having problem, try plug your PS3 directly into your modem (bypass the router.