My father worked at Bell Labs. He said the rules of the monopoly signed with the US govt drove innovation. AT&T, which operated Bell Labs, could charge cost

My father worked at Bell Labs. He said the rules of the monopoly signed with the US govt drove innovation. AT&T, which operated Bell Labs, could charge cost plus a fixed percentage, but it was based on costs from N years earlier. I believe N=3. Anyway, if AT&T improved costs, it became more profitable. The profits of the company depended on innovation. The employees knew that. And it innovated.