Yes, you do need one, at least during the installation process. You are right that it is mainly used for the PPV movies, but it is also used for various maintenance tasks, such as checking for software revisions/updates. Also, if you leave the unit disconnected from the phone line for a very long time, you will get a huge buildup of "mail" messages from the unit itself warning you that it hasn't been able to make a call. After a year or so, this will actually slow the overall operation of the DirectTivo down quite a bit (as I found out the hard way!)