Alternate CD upgrade uses network even when it promises not to

I am upgrading from 11.04 to 11.10 using the cdromupgrade on the alternate cd. In the beginning it asks if one wants to download the latest updates, and *promises that the network will not be used at all* if one selects 'no'. However, even on selecting no, it does download packages ("fetching file 1756 of 2426 at xx kB/s"), thus breaking its promise. Depending on how the user is paying for the bandwidth, the update manager's lie this might even cost the user real money.

ProblemType: Bug
DistroRelease: Ubuntu 11.04
Package: update-manager 1:0.150.3
ProcVersionSignature: Ubuntu 2.6.38-11.50-generic 2.6.38.8
Uname: Linux 2.6.38-11-generic x86_64
Architecture: amd64
Date: Sun Oct 16 16:20:03 2011
GConfNonDefault:
 /apps/update-manager/check_new_release_ignore=natty
 /apps/update-manager/first_run=false
 /apps/update-manager/window_size=(600,570)
InstallationMedia: Kubuntu 10.10 "Maverick Meerkat" - Release amd64 (20101007)
PackageArchitecture: all
ProcEnviron:
 LC_TIME=en_IN_PRK.UTF-8
 LANGUAGE=en_IN:en
 LANG=en_IN
 LC_MESSAGES=en_IN.UTF-8
 SHELL=/bin/bash
SourcePackage: update-manager
UpgradeStatus: Upgraded to natty on 2011-10-16 (0 days ago)