Ma Bell was regulated and they used the labs partly as a slush fund to smooth out their apparent earnings. When they got a rate increase, the labs would be wel

Ma Bell was regulated and they used the labs partly as a slush fund to smooth out their apparent earnings. When they got a rate increase, the labs would be well funded for a while, so AT&T wouldn't have to show an unseemly spike in profits. When they went for a long while without an increase, the labs would run lean until the next increase came. At least that's what someone told me back then.