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The Evolution of Domain Names

Back in the late 70s, in the early days of the Internet, the network designers needed a method of telling the hosts on their network apart. They went through several iterations and changes to address schemes and communication protocols, eventually coming up with the Internet Protocol (IP) address scheme. They initially assigned names to addresses in a single file called HOSTS.TXT, which they copied to all of the small number of interconnected hosts.

After passing this file around to all their hosts got a little impractical, they created the domain name system or DNS, in 1983. This grew into a global infrastructure, which, despite it’s relatively simple mission (returning a unique numeric IP address when given a text-format name) is now a multi level hierachical database, comprised of thousands of DNS and bind servers.


The Evolution of the Registry and the Registrar

At first, the US government doled out domain names for free, mainly to universities and research institutiuons. After the Internet migrated out of these institutions, and companies and individuals got involved, the free distribution of domain names soon came to an end. In 1993, registration of domain names became a private, subsidized business, at least for .com, .org, and .net extensions. In 1995, fees were introduced.

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NSI (Network solutions), who had operated the handing out of free domain names, became the sole Domain Name authority for the Internet, taking over this function from InterNIC, who had contracted it to them in 1991. The initial fee was $100 per name, for two years.

This changed in 1998, with the delegation for DNS management to ICANN, originally formed to take over for IANA in the distribution of IP addresses. With this came the separation of the registry (the database administration portion of the task of updating the DNS system) and the registrar (the commercial business of collecting registration fees and administering the Domain Name registration process).

Dozens of registrar companies like Gandi SAS began to form, offering services that complement the ownership of a domain name, such as hosting services for web and email. NSI maintained a monopoly on .com, .net, and .org, but NSI was purchased by Verisign in 2000, and Verisign sold off the registrar portion of the business in 2003. NSI still runs as a registrar, and Verisign remains the accredited registry for .com and .net extensions.

Domain names continue to evolve. The separation of the registry and the registrar has allowed entities such as governments to form part of the picture once again. The ccTLDs (Country-Code Top-Level Domains), introduced in 2010, are mostly managed by different registries. These registries are sometimes government agencies or offices, sometimes independent companies on contract to governments. They are delegated the authority by IANA (http://www.iana.org/domains/root/db/), and may implement a variety of restrictions and rules for who may register and for what purpose. This is why you need to be a resident of the EU to have a .it domain, for example, or an address in Germany for a .de.

In 2011, after long discussion, the .xxx domain was introduced, ostensibly to allow pornographers to more easily designate their domains as hosting adult material, though certainly not all pornographers agree that this is a good thing for their business, or that ICANN acted appropriately in allowing the xxx extension (see this lawsuit).


That’s where we are now, or where we were until last week.


Avoiding Friday the 13th , on the 12th of January, ICANN announced unrestricted gTLDs as available for application. If you are wondering what an unrestricted gTLD is, think “dot brand” instead of “dot com” and you will get the idea. Here’s a link to more info.

The new gTLDs certainly have the potential to disrupt the relatively settled state of domain names we know now and are more or less comfortable with. ICANN is moving ahead with the proposal despite the obvious potential for confusion, the need to rebrand millions of products and services around new names, and the resistance that is being put up from many entrenched interests like the ANA.

Critics of ICANN’s handling of the initial gTLD proposal in 2008 point out that the registries (and, for that matter the registrars, like Gandi) stand to make a lot of money when the new monikers start to be allowed. It is not unlike a real estate boom, with green fields to be developed. It is up to ICANN to prove to it’s critics that it is not bowing to inappropriate pressure from those who star to gain, and that it’s interests are not in conflict when it approves such regulations.


As big a deal as this is, we will have time to adjust to it gradually. Only 1000 gTLDs will be released a year, and the first of them won’t show up for about a year at the earliest. The application price is so high ($185,000 USD), that it puts a gTLD name out of the reach of most small businesses. The ability to obtain and resell a name that is not related to the business you do, or one that relates to many businesses, not just yours, will be restricted severely. It will be very hard to “typo-squat” or snap up gTLDs and resell them to later claimants.

Still, to really manage one of these names and all of it’s ancillary brand protection provisions is probably much more expensive than just the application fee.


Gandi is cautiously optimistic that ICANN will be able to manage the release well, and we are looking forward to what the creative minds in the community will do with the new digital real estate. It certainly will cost some businesses a significant amount of money to take advantage of the opportunity, but that’s true for a lot of things. It’s the businesses that manage opportunities and take risks that reap the benefits, and having more opportunities is never a bad thing.