It's relatively easy.

  1. Download the root.zone file.  Add your new TLD to it, _but don't change anything else_.

  2. Configure and run the necessary DNS software (e.g., nsd, tinydns, etc. plus dnscache, or maybe pdns_recursor) on a computer with a publicly reachable IP address (a "server").  

  3. Tell your users the IP address of your server.  They can then change their DNS settings to point to your server.  

You now control the root nameserver for a new TLD.

I run my own root.zone and DNS service for my devices at home and I have some custom TLDs. As such, I "control the root nameserver for a TLD". And I did not pay ICANN anything.

What gives ICANN their ability to make money from this stuff is that for some reason not many people run their own root.zone.[1] Almost everyone points their DNS caches at the ICANN root.zone. Blind faith?

1. Running your own root.zone allows you to add or remove whatever TLDs or individual domainnames you wish. Quite a few people do desire the removal of individual domainnames, i.e., "filtering" and pay OpenDNS for this "service". You can accomplish this by running your own root.zone, for free.

To add to this OpenNIC[1] is a project encourages people to host their own name servers and even add additional TLDs to their DNS network.

[1]http://www.opennicproject.org/

Thank you.

You pay ICANN a lot of fucking money

For $185k you get to ask ICANN for a tld. If they accept, I believe it's an additional $185k per year. Not sure if you get your money back if they refuse.

You don't.

Wow, that sounds like a racket.

I've been told it's $25K/yr ongoing.