Former Bell System entities continued to evolve. Over time Lucent Technologies spun off the component manufacturing part of the company as Agere Labs and the enterprise business systems part of the company as Avaya Labs. Telcordia was acquired by SAIC and later purchased by two private equity firms. ATT spun off the wireless services part of the business (as ATT Wireless, subsequently acquired by Cingular in 2004) and sold the cable services part to Comcast Communications. SBC and ATT then merged in early 2005 under the ATT name. Early 2006 saw a proposed acquisition by ATT of Bell South.
It initially appeared as though research might continue to grow and prosper within the former Bell family laboratories—Lucent Bell Labs, Bellcore research, the new ATT Labs, Agere Labs, and Avaya Labs—as well as within new telecommunications firms. Indeed, figures gathered by Michael Noll showed that the number of former Bell family company researchers grew from about 1000 in 1960 to 1200 in 1981 to about 1920 in 1997, but then fell off to 1570 in 2001. Data reported by Noll on research and development expenditures by the Bell family companies showed significant growth from 1981 ($3.2 billion) to 2001 ($6 billion).
One of the Bell System offshoots, Lucent, continued to make a significant commitment to research, albeit one that decreased in total dollar terms as Lucent shrank. It has continued to fund Bell Laboratories at a rate of roughly 1 percent of revenue, further supplemented by some support from government research and development contracts. That allocation of 1 percent, which might be viewed as a best practice for a large equipment vendor, funds a mix of research in basic sciences, exploration of disruptive technologies, and more incremental work for meeting current customer needs.
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