At the time the Internet was born, it was a plain US governmental development. Within several years it had turned into a research and data-exchange network among universities and other academic organizations. The network gained a public face in the 1990s and by late 1994 there was growing public interest in the previously academic/technical Internet. In the middle of the 90's the availability and importance of the Internet began to expand very rapidly.
The elemental building block of the Internet is the Internet Protocol (IP) address. All participating network devices - including routers, computers and printers-have their own unique address.[1] The main benefits of the current IP system are i.a. on the one hand, that computers are able to easily identify each other and on the other hand that no confusion could occur at technical levels, given that every single device has its unique identifier. IP addresses, however, are hard for humans to remember. This need revived the Domain Name System (DNS) of the 1980's, with which servers became available not only under IP addresses consisting of numbers (e.g. 192.0.34.163) but under strings like icann.org as well. The system which we still use today for mapping hosts and domains to IP addresses and actual machines was launched in 1984. Under this system, DNS information is spread across the Internet with no one machine maintaining information on all hostnames. Each domain owner maintains information on their own hosts with a central authority maintaining records on where each domain owner keeps their information.
The maintenance of the Internet and the Domain Name System continued under contract to the US Department of Defense, and its agencies, for many years. Then, in 1991, the US National Science Foundation (NSF) assumed responsibility for the non-military portion of the Internet. In 1992, the NSF awarded a US company, Network Solutions Inc. (NSI), a contract for managing the registration of domain names and maintenance of domain name information. After NSI's contract to administer the main top-level domains expired in 1998 a US not-for-profit corporation, the Internet Corporation for Assigned Names and Numbers (ICANN), established by the US Department of Commerce, was charged with taking over the domain name system as well as other Internet infrastructure responsibilities.[2]
Every domain name ends in a top-level domain (TLD) name, which is always either one of a small list of generic names (three or more characters), or a two character territory code based on the ISO-3166 list (there are few exceptions and new codes are integrated on a case by case basis, like recently the European namespace .eu). Top-level domains are also known as first-level domains. The generic top-level domain (gTLD) extensions are: .biz .com ,edu .gov .info .int .mil .name .net .org .aero .cat .coop .jobs .mobi .museum .pro .travel .mobi. There are 250[3] country code top-level domain (ccTLD) extensions like .cz, .hu, .eu, .de, .de, .uk, .ru, .tv etc.
In addition to the top-level domains, there are second-level domain (SLD) names. These are the names directly to the left of .com, .eu, and the other top-level domains. As an example, in the domain law.pte.hu, "pte" is the second-level domain. On the next level are third-level domains. These domains are immediately to the left of a second-level domain. In the law.pte.hu example, "law" is a third-level domain. Domains of third or higher level are also known as subdomains.
At this point, reference has to be made to ICANN's role regarding the management of the DNS, since ICANN not only controls the so-called root domain, but delegates control over each top-level domain to a domain name registry. For ccTLDs, the domain registry is typically controlled by the government of that country. ICANN has a consultation role in these domain registries but is in no position to regulate the terms and conditions affecting how a domain name is allocated or who allocates it in each of these country level domain registries. On the other hand, generic top-level domains (gTLDs) are governed directly under ICANN which means all terms and conditions are defined by ICANN with the cooperation of the gTLD registries.[4]
Name registries, also known as Network Information Centers (NICs) may be operated in many different ways. Some are government departments (like the registry for the Vatican), some are co-operatives of internet service providers (e.g. DENIC in Germany or ISZT in Hungary) or not-for-profit companies (such as Nominet UK). Others are commercial organizations (such as the US registry). The model of the registration, however, is certain under all namespace, for
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example under the .hu namespace there is the registry ISZT[5], which maintains the namespace and sets forth the rules thereof and there are several registrars who are accredited by the registry and who provide .hu domain name registrations for registrants who would like to use a certain domain name for their own purposes (e.g. a website, email-services, VoIP etc.). From a legal perspective it should be stressed that there are two contractual relationships; one between the registry and the registrar and one between the registrar and the registrant. This means that there is usually no direct contractual link between the registry and the registrant, although there are some registries which provide registration services directly to registrants.
According to ICANN, it established market competition for gTLD registrations resulting in an 80% reduction in domain name costs. Without examining the prices of domain names from the middle of the 90's when it was decided that the registrant should pay a fee for domain registration it can be stated that the cost of registration and the maintenance of a domain name (with a few exceptions) could be marginal. Provided that a name has not yet been registered by another party the registration fee would amount to around €10, with the fee for maintenance between €7-€20, even though there are certain ccTLDs under which a domain registration could cost as much as €150-€180.
However, when trying to determine the real market value of a domain name, the above mentioned costs do not mean anything. If we consider recent domain name sales we may conclude that the purchase prices of certain names could exceed several million US dollars. The most expensive names have usually been registered under gTLDs and especially under the .com namespace; they are so-called generic terms, likeflowers.com, loans.com, car.com, sex.com etc. The current recorder is business.com: it was sold recently for $345 million. Nevertheless the market for ccTLDs looks likely to boom as well.
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