If you have ever registered a domain name for your website, or even if you just know a little about the process, you may be wondering about a few things: since domain names aren't a physical product, who or what exactly decides how they are priced? Who creates them? Who manages them? Who is this "ICANN" character that I keep seeing on the homepage of my registrar? And what even is a registrar, anyway? This article will be giving you a peek inside the surprisingly simple world of domain name registration, following the case of a peculiar domain extension, .BOND, to guide you through the levels of organization at play.
The top-dog of website and domain administration is an organization called ICANN. ICANN, or the Internet Corporation for Assigned Names and Numbers, is a not-for-profit institution founded in 1998 that oversees and regulates domain name policies in order to "keep the Internet safe, secure, and interoperable" (Source). They also oversee DNS, which stands for Domain Name System, and allows for the use of domain names to find locations on the Internet, as opposed to a complicated IP addresses that computers have to use to find data.
Generally, any time something new happens in the field of domain naming, it happens under the influence of ICANN. Take the release of the .BOND domain extension, for example. A college called Bond University reached out to ICANN in order to create a brand new, never before used domain extension (.BOND) to be used by them and them alone.
Unfortunately, for the purposes of understanding the curious history of the .BOND domain extension, the part played by Bond University begins and ends rather quickly. Bond University is a reasonably sized private, not-for-profit university in Queensland, Australia. It has only been open for a short time, since 1989. They reached out to ICANN to create the .BOND extension in 2014. Later that year, they finalized their contract. However, for one reason or another, the newly obtained domain went widely unused-to this day only one instance of a .BOND domain from Bond University exists as a placeholder domain.
That would be where the story ends, if not for the saving grace of another company, ShortDot. ShortDot is an Internet registry, a term which will be defined a little later in the article. Needless to say, they noticed that the .BOND extension was going unused and under the radar in the hands of Bond University. They saw potential in the .BOND extension, thinking that it would appeal to "bail bondsmen, offerers of financial bonds, and yes, even James Bond fans" (Source).
They decided to swoop in and purchase the contract with ICANN from Bond University, effectively terminating the University's exclusive rights to it while simultaneously saving .BOND from internet purgatory.
ShortDot, from the beginning, had plans to make the domain extension available as a gTLD, or generic Top Level Domain. This would mean that any user could purchase access to the extension from an accredited registrar (stay tuned to read a definition of this type of organization as well). However, since the contract with ICANN was for the University's exclusive use, the contract had to be renegotiated. After some work, and no doubt a lot of legal humdrum, they finalized their contract in 2019. As of writing this article (in late December of 2019), the domain is available for public use from a few different ICANN accredited registrars, and are being sold for around a thousand dollars a piece.
Registries & Registrars
Thus far, I've thrown around a couple of jargon terms-registry and registrar-pretty casually. While the difference between these two entities is not intuitive, I assure you they are very easy to tell apart.
A domain registry is an organization that oversees one or more domain extensions. They manage rules about who can use the domain and under what circumstances, they set the prices, and they decide who can distribute access to the names. ShortDot oversees the .BOND domain extension, plus a few others, so they are a registry. VeriSign is one of the largest registries in existence, and they oversee the ubiquitous .COM extension.
A domain registrar is an entity from which a user can purchase, or register, a domain and domain extension for their personal use. 101domain is an ICANN accredited domain registrar, which means they are allowed to sell .BOND domains, and therefore makes them a good example to use. The way their business model works is that a registry, let's say ShortDot, sells domains to a registrar, which buys them wholesale (.BOND domains are sold for around $5 - $10 a piece). The domain registrar then has permission to sell individual domains to users, usually with a hefty markup in order to ensure a feasible profit margin. If you're interested in seeing which .BOND extensions are available, and their significant markup prices, you can check that information out with most domain registrars, like 101domain.
Being an ICANN accredited registrar is a bit like having an ICANN seal of approval attached to the business. To pull a quote from ICANN itself:
"ICANN is a technical coordination body. Our primary objective is ensuring the stability of the Internet's system of assigned names and numbers. This objective is furthered by the requirement that every business desiring to become a registrar with direct access to ICANN-designated top-level domains must first become accredited for this purpose by ICANN." (Source)
Essentially, the ICANN stamp of accreditation is what allows ICANN, 101domain (or other accredited registrars) and a registry (in this case ShortDot) to work together as a cohesive whole.
While this article describes the most common business practices between registries and registrars, there are some exceptions. Occasionally, registries allow domain names to be purchased directly from them. Furthermore, not all registries are independent organizations; some are government operated, as is the case with India's registry gov.in. Some registrars also manage "resellers," which are a further step down and sell domains to users on behalf of the registrar, and not the registry. Most of the time, however, registries sell domains "wholesale" to a third-party registrar, which then sells them "retail" to individual registrants.