You can tighten that middle loop up a bit by getting out of "C think" and getting into "Perl think":

while (<DATA>) {
  my ($time, $switch) = split "\t";
  if ($switch eq $last) {
    $output[-1] = $_;
  } else {
    push @output, $_;
    $last = $switch;
  }
}
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The $cursor variable is unnecessary, because Perl always knows how long the array is.

-- Randal L. Schwartz, Perl hacker