The TiVO has a modem in it that can be used to connect with TiVo, and is used during initial setup. It also has a USB port on the back that can take USB ethernet or selected USB Wireless adapters, this network ability can replace the phone after initial setup for the connection to TiVo. Setup is pretty painless and takes less than an hour. After you are done, the TiVo will need to digest information it downloaded from TiVo and may require a reboot in order to install new software. This takes an hour, or maybe two, but TiVo says it will take four. Once this initial setup is done, TiVo pretty much takes care of itself.