As described in ICANN's Internet Coordination Policy Statement 3: A Unique, Authoritative Root for the DNS:

"From the very beginnings of the Internet, the technical community has recognized the need for central coordination of the unique assignment of the values of identifiers. The Internet Assigned Numbers Authority (the IANA, now operated by ICANN) was created to fill this need; it now makes assignments of unique values for approximately 120 different identifier types. This responsibility has always been understood to be a public trust, and the IANA long ago adopted the motto: "Dedicated to preserving the central coordinating functions of the global Internet for the public good."

"The most commonly known of the Internet's uniquely assigned identifiers, of course, are domain names. From the time the Domain Name System (DNS) was deployed, the Internet community made the IANA 'responsible for the overall coordination and management of the DNS, and especially the delegation of portions of the name space called top-level domains.' RFC 1591, 'Domain Name System Structure and Delegation' (J. Postel Mar. 1994). As in its other assignment responsibilities, the IANA's role is to act in the public interest, neutrally, and without proprietary motives.

"In the Internet's early years, with limited exceptions day-to-day registration activities for domain names were done by a single company (first SRI and later Network Solutions) under the IANA's guidance.

"By the mid-1990s, however, the growth and increasing commercialization of the Internet led the U.S. Government's Green and White Papers to note the emergence of 'widespread dissatisfaction about the absence of competition in domain name registration.' This dissatisfaction prompted the Green and White Papers to include the promotion of competition in registration services as one of the four values (stability; competition; private, bottom-up coordination; and representation) that should guide the Internet's technical management. Both documents made clear that, of these four values, preservation of stability was to be paramount.

"Building on the IANA model of a non-profit entity carrying the public trust to perform the vital central coordination functions, the U.S. Government reconciled the need to ensure Internet stability with the desire to introduce competitive domain-name registration services as follows: 'In keeping with these principles, we divide the name and number functions into two groups, those that can be moved to a competitive system and those that should be coordinated. We then suggest the creation of a representative, not-for-profit corporation to manage the coordinated functions according to widely accepted objective criteria. We then suggest the steps necessary to move to competitive markets in those areas that can be market driven...'

"After public comment on the Green Paper, the United States Government issued the White Paper, which laid out the basic charter on which ICANN was founded and continues to operate. The White Paper re-emphasized the prime directive of stability and, to that end, the need to avoid creation of alternate roots: 'The introduction of a new management system should not disrupt current operations or create competing root systems. During the transition and thereafter, the stability of the Internet should be the first priority of any DNS management system.'

"The United States Government then invited the Internet community to form a not-for-profit corporation to perform the 'coordinated functions' that should be handled as a matter of public trust, rather than according to a competitive regime that would not be conducive to stability. Among the 'coordinated functions' were management of the root-server system and decisions to introduce new TLDs: 'Similarly, coordination of the root server network is necessary if the whole system is to work smoothly. While day-to-day operational tasks, such as the actual operation and maintenance of the Internet root servers, can be dispersed, overall policy guidance and control of the TLDs and the Internet root server system should be vested in a single organization that is representative of Internet users around the globe... In order to promote continuity and reasonable predictability in functions related to the root zone, the development of policies for the addition, allocation, and management of gTLDs and the establishment of domain name registries and domain name registrars to host gTLDs should be coordinated.'

"In response to this invitation for the formation of a non-profit, Internet-community-based organization, ICANN was established in 1998. ICANN was subsequently selected by the United States Government from among several proposals submitted precisely because it was open, consensus-based, and rooted in the Internet community."

As stated in that same Internet Coordination Policy Statement 3: A Unique, Authoritative Root for the DNS, "ICANN, among its other responsibilities, now acts as the coordinator for operation of the authoritative root-server system and the policy forum for decisions about the policies governing what TLDs are to be included in the authoritative DNS root.

"In linking the formation of ICANN to the global Internet community, the White Paper established a public trust that required that the DNS be administered in the public interest as the unique-rooted, authoritative database for domain names that provides a stable addressing system for use by the global Internet community. This commitment to a unique and authoritative root is a key part of the broader public trust – to carry out the Internet's central coordination functions for the public good – that is ICANN's reason for existence."