Why are phone cords curly?

The curls in a telephone cord are an anti-tangle mechanism.   The longer a 
cord is, the more likely it is to get tied up in knots.  This is very much 
like human hair (longer hair gets into more tangles).  The curls in a 
telephone cord are a clever way to keep the cord short until you need it 
longer.  As you move the headset away from the base, the cord stretches 
with you.  A two foot curled cord can stretch to six feet as needed, and 
conveniently shrink back to two feet when you are done.

The curls are made in a very similar approach the curls in human hair.  
The phone cord is wrapped around a heated rod.  The heat softens the 
plastic insulation and molds it into a spiral, so when it cools the spiral 
is the natural shape.