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Karl Denninger on market-ticker.org explains the technology and background of the domain name system here.

The Internet Handover Scam

Ok, folks, I've had enough of Ted Cruz and a handful of others trying to fundraise on the back of the Internet handover issue.

First, this is not a surprise nor something Obama cooked up in the dead of night. The expiration of the existing arrangement has been known for literal years and the timing of same has been known for the same amount of time. If the US Congress wanted to intervene it has had years to do so and has intentionally not done so. So to Ted Cruz and others (Jim DeMint anyone?) who is now claiming "emergency", go perform an anatomically-impossible act; if you were more-focused on policy and less on your own horse**** you would have dealt with this months or even years ago.

Second, on to the technical side: There are two rough components to Internet "governance." The first is handled through domain name registration. Originally this was all handled under government contract by a government-dished out monopoly. During that time domains were $50/year plus whatever the ISP that registered them for you and ran your DNS charged, and it often took days (instead of seconds now) to get a domain registered. These were COM/NET/ORG/MIL/GOV/EDU and the country code domains; in the US that was .US. This changed through a quite-contentious (and, IMHO, a rather cronyism and lie-laced) process into what we have now with many TLDs. I will note that the so-called cognoscenti of the time tried to claim that expanding the TLD list on a material basis was not going to work for technical reasons...

"During an often-contentious hearing Wednesday, Sen. Ted Cruz, R-Texas, took on the Obama administration for what has become his latest signature issue: internet oversight.

"The Obama administration is due to relinquish U.S. control Oct. 1 over a private-sector, nonprofit organization that administers internet domain names and designations. Cruz warned that the Internet Corp. for Assigned Names and Numbers will not on its own honor U.S. protections of free speech, and he is leading an effort to delay or stop the transfer..."

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"On October 1st, the US Government's National Telecommunications and Information Administration will hand over control of the internet's domain name system to the Internet Corporation for Assigned Names and Numbers (ICANN), a 'multi-stakeholder' nonprofit organization. While the change will be invisible to the billions of internet users out there, starting in October, the US government will no longer control what some call the internet's 'phone book.'"

... "Again, regular users won't notice a difference in their internet come October, but the switch isn't without controversy."; More about the internet transfer