I had another brand new apple watch series 5 that couldn't pair with iOS 14, but after a few tries, I somehow manage to pair & update without using other iphone with iOS 13. Here's what I did:
At first, I got the same error message during pairing, "couldn't connect to the internet to update watchOS". Then I tried using only 2.4GHz wifi like I saw in the other thread, but that didn't work either. So after restoring 5GHz wifi, I tried pairing using another iphone with iOS14, and of course it still gave me the same error.
But then I then restarted my original iphone. After it booted back up, I enabled airplane mode and tried to do the pairing step again, and suddenly I can update the watchOS to 7.0.1. After the watch is updated I can proceed to pairing and setup.
I have no idea what worked, did the airplane mode did the trick? Or the iphone switching? Or the restarting? I swear I tried the same things before and none of it worked, but now it works so beats me... Apple better release iOS update or info soon.