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Your misunderstanding lies here:

> 3- one or some of the domain owners, for example for fraser.name, acted as a registry themselves managing authoritative DNS servers for NS records of .fraser.name domains, these third level DNS servers being pointed to by the name. NS records.

There was no domain owner for fraser.name. Verisgn acted as the registry for fraser.name and allowed a registrar to directly register bob.fraser.name.

Before 2004 these third-level domains were the only way to register .name domains. It was the intended structure. See Wilipedia for an explanation: https://en.wikipedia.org/wiki/.name#Structure



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