Why Your Domain Registration Costs That Much
webmasters.stackexchange.com
webmasters.stackexchange.com
.sm is the Most Serene Republic of San Marino and even on a map of Italy it is little more than a dot https://en.wikipedia.org/wiki/San_Marino#/media/File:Locatio...
The population is 33k, and my registrar (Gandi) has to email someone just to change a nameserver... it can (and has) taken weeks.
I actually think this is a benefit; in an age where the domain is the key to securing everything there is a view that too much automation and too low a price results in too lax security. A race to the bottom in terms of price means every other corner is cut.
The best registrars for security are those that are expensive, slow, manual, bureaucratic, officious. Hell, last time I tried a nameserver change it took 6 weeks and several confirmations of identity - interacting with a country office certainly forces ass-covering of the highest nature.
I'm a fan of slow, stupid and manual but of course... security is different from the whole Verisign .com .net mess.
That .sm per year? GBP 263.25
https://www.gandi.net/domain/price/detail/sm/
$10 really isn't much.
https://www.domcomp.com type in .sm in the filter box
It's best to break apart that question into 2 components:
1) "What do domain name registrars do?"
2) "What justifies this extra $9.82?" <-- accepted answer explains this via the history of politics and government bumbling
To answer the sub-question, "what do domain name registrars do?" for a technical audience like webmasters.stackexchange, it would make more sense to explain the technical landscape because it's somewhat of a mystery blackbox to many people. Also by understanding this, phrases such as "monopoly over .com address" make no sense. It's not really a business monopoly but a natural technical boundary of database administration. Unfortunately, the technical underpinnings look like a business monopoly on the surface.
Imagine an absurd (but simple) scenario. You create a new TLD called .hackergeeks. You'd have to "administer" that tld. That means you literally hold the master database of records for that tld. To do that, you might grab one of your old laptops with a 100GB harddrive from the closet and load up MySQL on it to hold the registration records. You filed paperwork with ICANN and they recognize you as the master authority for .hackergeeks. ICANN does not hold the database records for .hackergeeks, you do. In turn, this means your computers are the ultimate authority for DNS resolution. ICANN also doesn't care whether you use MySQL, PostgreSQL, Oracle, or SQLite for registration records. You just need to have some type of acceptable hardware infrastructure to administer the domains. If you're just selling a few thousand .hackergeek domains, your modest laptop would work. Obviously, this is oversimplifying things but the idea is to picture some entity (that's not ICANN) literally spending money on hardware+software+electricity to maintain a database.
Now, Verisign holds over 117 million .com domains[1]. Obviously, they have a lot more hardware infrastructure to handle that capacity. Registrar resellers like godaddy or namecheap sell ".com" addresses but their datacenter computers don't actually hold the master database records for the ".com" they sell -- it's the Verisign computers that hold it. Verisign also has a larger staff to handle non hardware stuff like legal processes (2 parties dispute ownership of a domain, fraud, etc).
Once the underlying technical picture is clear as to what authoritative registrars (not reseller registrars) actually do, then the pricing question can be analyzed. We speculate that the overhead to run and maintain the master .com registration database to be somewhere between 9 cents and $7.85[2]. That's a different question involving profit margin targets, competition, politics, etc that the accepted stackexchange answer explains.
To address the "monopoly", how would a de-monopolized ".com" actually work from a technical standpoint? Again, somebody has to maintain the master database. Would we de-monopolize by having one Company ABC Inc to hold database records for A-M.com and another Company XYZ to hold records for N-Z.com? We would then have DNS servers with an if/then/else statement to route queries to the correct database? Or what if we do a SHA1 hash and distribute (shard) the ".com" database records over 10 different companies? Company A has 17 million records. Company B has 17 million records, and so on for a total of 117 million records we have today. We'd then have DNS servers burning up cpu cycles calculating billions of hashes repeatedly to send queries to one of 10 databases. Therefore saying "Verisign has a monopoly over .com" actually obscures the picture. It is more important to avoid monopoly at the entire DNS level (via TLDs) instead of the ".com" level and that's what we already have today.
With all that said, Verisign profit margins to administer the ".com" database is too high considering the falling prices of compute power and disk storage. Maybe a better scenario would be a government non-profit entity. The USA government already manages 300 million social security numbers, the millions of Federal Tax IDs for businesses, and passport IDs. Therefore, the government managing databases of unique IDs is not outside the realm of possibility. Another option might be decentralized ownership of ".com" via a distributed block chain similar to bitcoin[3]. I'm not familiar enough with it to know if it can handle the high registration activities of 117 million addresses.
[1]http://www.verisigninc.com/en_US/channel-resources/domain-re...
Now try doing it on tech from when the internet was first invented.... Maybe that's why?
You could store the entirety of .com (and all other TLDs) on a midrange server. There might well be such a server that serves as the Source of Truth for the database.
The much harder part is serving those records authoritatively for billions of requests, which is why we have Root Nameservers. There are 13 of them (by DNS name) distributed around the world, all synchronized from the same SoT. The total number is actually much higher (500?), because they are redundant locally and Anycasted globally.
Also, FWIW: Domain name registration was free from inception in 1983 until 1995, at which point .com registrations were $50/yr, minimum 2 years for first registration, with only one vendor (Network Solutions).
1995 was the year of Netscape and the Internet on the cover of Time magazine. NetSol was the monopoly vendor, and 30% of that registration fee went to the U.S. Government (National Science Foundation), which was the majority funder of the post-ARPANET internet. This fee was to establish an "Internet Intellectual Infrastructure Fund". After a lawsuit, the fee was scrapped (illegal tax) and instead the entire remaining $70 fee went to the granted-monopoly private corp NetSol.
Prior to NetSol, domain registration was handled by one guy working at USC, Jon Postel. Over email. Even then, there were almost a dozen (early 90s tech) Root Nameservers to handle the query load.