One more thing that needs the phone line is PPV. PPV data is stored in the individual receiver, I believe, and transmitted via phone line. All of them need to be hooked up to use PPV properly. Obviously, this only affects you if you use PPV.

Larry,
I've never not had mine hooked up, so I've no personal experience. But I've read comments from people who lost PPV ability or lost all programming or just their premium packages. It sounds like yours might have been a software thing more than Direct coming after you.