Well, you're both wrong, in my own (not particularly humble :) ) opinion...Top
level domains are not intellectual property that can be "stolen". They're part
of a naming system, just like area codes are part of the telephone numbering system
and zip codes are part of the postal addressing system.
Until ICANN added .biz
to its root, there was no such thing as .biz in the Internet's naming system.
The fact that various people had used naming systems in their private sites that
happened to include that string of characters didn't give them "ownership" of it,
any more than I would own Area Code 212 if I had happened to have set up that string
of numbers as meaning something in a private telephone exchange some time before
it was officially assigned to New York City.
I can put any domains I want in a
"HOSTS" file on my Windows system, and they'd then work for me (but nobody else).
Would that give me ownership of those names? Would it be any different if I
got the administrator of the LAN at work to set those names up, so the dozen or so
people there could use those addresses? Or if I got a local ISP to set them
up so a few hundred people could use them? Those names still wouldn't be part
of the Internet naming system, and wouldn't establish any sort of claim to them ahead
of the ICANN approval process.