On a comment to another article on my site, someone asked: “Why do you have to pay an organisation to buy your own web address, isn’t the internet for everyone and why should you pay a monthly fee for a domain name that only you could create, why?”
You raise a very interesting question, actually, and it’s one that has more to do with the hidden infrastructure costs of the Internet than anything else. Consider the cost of building the roads in your community as a point of comparison: when you drive from your home to the market, you don’t have to pay a toll or a per-mile charge. And yet, you do, in a number of subtle ways.
For example, if gasoline costs $4.00 per gallon (or a bit less than 1 Euro per liter) then your payment of that includes, typically, at least 25-35% in taxes, most of which are road taxes. In this sense, it’s a “usage” tax, and works well because people who drive a lot consume more gasoline and therefore pay more road taxes by virtue of getting more gas.
That revenue is typically insufficient to properly maintain the highway system so there are additional taxes that help fund the construction crews, maintenance teams, snowplows, street cleaners, paint crews, etc. Actually, construction is typically funded with bonds, at least in the United States, so that’s yet another form of “hidden” revenue.
Now think about the Internet. You go into a public library and can surf to your hearts content without paying a penny for the computer, computer time, Internet access, or the remote sites that you’re accessing 99% of the time.
But it costs money to build and maintain the Internet, not to mention the cost of purchasing, configuring and hosting all of those servers, the programmers and designers needed, the administration folk, etc etc. So where does that come from?
One place that can generate revenue to cover the infrastructure costs of the Internet, particularly the Domain Name Servers that let us type in a name even though the system works with numbers, is through the fees associated with domain name registration.
Interestingly, though, that’s actually gone down in price as the Internet has become more popular: I remember when I registered my first domain name in 1989 (intuitive.com) that it was $35/year and that there was one company that ran the entire space: Network Solutions. Now there are dozens of registrars and domains typically cost around $10/year to own.
If you’re paying a monthly charge, however, you’re also probably paying for hosting the domain on a server somewhere. The analog here is that you could pay for a phone number but never have a phone plugged in: in the same way you can own a domain name but not have it actually “go” anywhere. To have a page that comes up when someone visits the domain name, that’s like plugging a phone into the wall, it’s the “hosting”. In that case, it’s quite common to have a small monthly fee since, after all, the company that bought and maintains the physical computers that actually serve up those pages have to recoup their costs and investments…
To get some other perspectives, I asked people on Google Plus this same question, and got these interesting answers: Simon Salt – Because like everything else the Internet is a business. You pay the post office to deliver mail. You pay internet registrars money to deliver visitors to your web address. There are places where you can have a “domain” that you don’t pay for – e.g. wordpress.com true it will have the words .wordpress.com in it but it still has some personalization in it. Nadja Kireta – You pay the people to register and set it up for you, because quite frankly, most people would probably not understand how it’s done, let alone have a server to store the data.
And my favorite answer, from Aric Ames:
“Domain names cost money because people are willing to pay for them. They’re scarce. In making a scarcity available to the public — you and me — generally the simplest democratized way of doing it is through a market. The entire infrastructure of DNS and ICANN (services, arbitration) is expensive. And, again, the simplest democratic solution is allowing countries and registries to set their respective pricing and allowing multiple registrars to set their own prices on top of that and compete for your attention. Markets like this improve the health and reliability of the net itself. It creates inter-dependencies for keeping the web alive. And anything with such economic might tends to mean you gain more legal right to what you register once you start using it.
“There is no sensible alternative.
“Letting people claim such a scarce form of ‘real estate’ isn’t easy. Probably all other procedures would involve a nightmare of paperwork and vast councils and judgments. That wouldn’t cover the bills. Likewise, one’s chance of getting a good name would be just as bad if not worse. I actually think name pricing should be substantially higher the first year, so names would only be registered by people who take them more seriously.
“There are some registries that let you claim a free domain name. http://chi.mp/ is one provider. And there are several alternative DNS models in the work, such as .bit via bitcoin. Maybe in ten years such things will be widespread. But who and what do you trust to be around now or in the future? Cheaper gTLDs exist too (e.g. “.info” for a couple bucks).
“Demand, reliability, and public appeal: $9/year for a dot-com is an extremely good price, all things considered.”
So that’s the long and short of it. Domains cost money because there’s a physical infrastructure that costs millions of dollars to build and maintain. There’s no free lunch.
Oh, and if you’re still looking for a domain name, you should definitely check out register.com, who supplied us with this handy promotion for AskDaveTaylor readers:
Try it, pick a top level domain then type in the word or phrase you seek, and see if you’re lucky and it’s available. Just don’t expect that free lunch…
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