How to think about Farcaster protocol data

Something I am confused about is; what entity decides whether to issue an FID or not? 

Is it in the protocol, that each new FID costs $3 to create?

Does that cover storage costs for Farcaster entirely?

FID contract is sequential integers.

FID contract is separate from storage contract. Storage is an annual cost. You don't lose your FID if you stop paying for storage. But your messages will get purged from Hubs.