This is one strange, oddball product.
It provides DHCP and NAT.....which is what a router does. So, technically you could call the 2210 a router. But...and this is a BIG BUT.....the oddball thing about the Motorola 2210 is that it will only provide one single IP address.....when a normal router provides dozens.
Since the 2210 only provides one IP address, when it is used in its normal, new out of the box condition......it is a product that is designed to work with only one computer.
If you hook up the 2210 to a router.....like the Time Capsule.....which also provides DHCP and NAT services......you will have an issue called Double NAT.....something that you really don't want on a network, since it complicates things....and Double NAT is known to cause several other issues like slow browsing (or no browsing.....loss of Internet).
If you want to use the 2210 with the Time Capsule.......the 2210 needs to be modified to work in what what is known as "Bridge Mode". With the 2210 in Bridge Mode, the Time Capsule can then be setup as the network router and there will be no Double NAT issues that way.
When the 2210 is setup to operate in Bridge Mode, the Time Capsule will need to change the way that it connects to the Internet from a normal DHCP setting to another type of connection called PPPoE. To setup the Time Capsule to provide PPPoE credentials, you will need to know your ATT user name (it might be your email address or account number) and the password that you have been assigned.
Honestly, things would be tons easier if you contacted ATT and asked them to provide you with a modem/router. Then, the Time Capsule can be easily setup in Bridge Mode and all will be well.