What if I do not have a Cable/DSL (Broadband) modem?
Installation in a student dorm where it is all wi fi (no ethernet)
airport time capsule 2T-OTHER, OS X Mountain Lion (10.8.4)
The Time Capsule requires a broadband Ethernet connection if you want to use it as an Internet router.
You could go ahead and configure the Time Capsule to provide a wireless signal and back up your Mac that way, but you would not be able to connect to the Internet when you were connected to the Time Capsule wireless.
Once the backup is done, you will then need to switch back to the school wireless network for an Internet connection.