You know, all this talk about the Internet and DNS zones and who owns them has lead me to believe that really, the US government should stay the hell out of it.

I agree. The FCC has reasonable cause to take care of the US domain, but just as international radio frequencies are allocated internationally, so must IP address space and DNS toplevel domains.

Now, 15 years ago, the IANA might have been in the position to delgate such power, but today... the Internet is radically different, and the contract between InterNIC & IANA should be void because the IANA doesn't *OWN* DNS any more. The US government doesn't *OWN* the Internet therefore control over the root zone shouldn't be relinquished to them.

You're confusing IANA with a government entity. IANA is where this stuff comes from because, for 25 years, IANA has been where this stuff comes from. The world has come to trust IANA's judgement in who IANA gets its new TLD's from (which is currently the U.N. and the IETF, and will soon include IAHC's Council of Registrars). For some reason the AlterNIC/eDNS people don't look to IANA like international treaty organizations with strong committments to reflecting public consensus. Your guess as to this reason is probably as good as mine.