DomainWire asks what will happen to the popular bit.ly URL shortener if Libya shuts down its Internet service (.ly is the country code for Libya). Several people have noted that no matter how cute the .ly suffix is to us in a domain name, it is ultimately controlled for a loony dictator, and therefore perhaps not suitable as a piece of global network infrastructure.
But if Libya "shuts down" the internet rather than taking aim at a particular service (and it could take aim at bit.ly given its use to spread news about Libya on Twitter), what happens to anything on the .ly domain name?
We can look to what happened in Egypt for a very recent and relevant answer.
When Egypt stymied the internet the primary servers the ccTLD operators used were inaccessible as they were in Egypt. This meant they couldn't resolve addresses.
In the case of the ASCII .eg domain name there were secondary servers that had cached the primary, meaning .eg domains were still accessible.