SecProbe.io

October 1, 2010
 Mr. Jeffrey K. Berg President and Chief Executive Officer Communications Systems, Inc.  10900 Red Circle Drive Minnetonka, MN 55343

Re:  Communications Systems, Inc.
  Form 10-K for fiscal year ended December 31, 2009
Filed March 18, 2010 File No. 001-31588  Form 10-Q for period ended June 30, 2010 Filed August 10, 2010 File No. 001-31588
Dear Mr. Berg:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.

Form 10-K for fiscal year  ended December 31, 2009

 Item 7. Management’s Discussion and Analys is of Financial Condition and Results of
Operations, page 17
 Results of Operations, page 19

1. We note your disclosure on page 21 that in ternational sales decreased 42% in your
Transition Networks segment in 2009 due to th e impact of the severe global recession
and currency fluctuations.  Yet, we notice in  the next sentence on page 21 you state that
despite customers delaying or canceling projects, the Company is continuing to invest in
international sales and marketing because long-term projects are promising.  If the

Jeffrey K. Berg Communications Systems, Inc.  October 1, 2010 Page 2

Company has any long-term plans or commit ments related to international sales and
marketing projects, this information shoul d be discussed in your management’s
discussion and analysis sec tion.  In addressing the Comp any’s prospective financial
condition and operating performance, there ar e circumstances, part icularly regarding
known material trends and uncertainties, wher e forward-looking information is required
to be disclosed.  Please confirm that you will provide such forward-looking disclosure in
future filings.

2. We note your disclosure on page 22 that Management is currently implementing
measures to improve the performance of your  Austin Taylor segment.  We note your
disclosure that management is  also considering various stra tegic alternatives related to
this segment.  Confirm that in future filings, if applicable, you will provide information related to various strategic alternatives considered by management to improve the
performance and results of operations of your operating segments.  Describe what
alternatives management is considering and what effect  management believes these
alternatives will have on each segment and the company as a whole.

Quarterly Operating Results, page 45

3. We refer to the footnote to your quarterly result s.  You state that dur ing the first and third
quarters of fiscal 2008, you recognized approxi mately $2.0 million of revenue related to
services that were invoiced and expensed in fiscal 2007.  Please tell us in more detail
about these transactions and your basis of accounting for the revenue and related expense
in different reporting periods.

Item 9A (T):  Controls and Procedures, page 45

4. We refer to Management’s Report on Intern al Control over Fina ncial Reporting.  You
concluded that, in the aggregate, no mate rial weakness existed as of December 31, 2009
related to documentation and review of significant accounting judgments and estimates,
balance sheet account reconcilia tions, financial closing proc esses and financial reporting
processes at period ends.  Please refer to It em 308T(a)(3) of Regulation S-K and revise
your conclusion to clearly provi de Management's assessment of the effectiveness of your
internal control over financial reporting as of the end of the most recent fiscal year,
including a statement as to whether or not internal control over fi nancial reporting was
effective.

5. Further, we refer to your disclosure regardi ng changes in internal control over financial
reporting.  You state that dur ing the period covered by your report on Form 10-K for the
year ended December 31, 2009, there was no add itional change in your internal control
over financial reporting (as defined in Rule  13a-15(f) under the Exchange Act) that
materially affected, or is reas onably likely to materially aff ect, your internal control over
financial reporting.  Please refer to Item 308T (b) of Regulation S-K a nd revise to clearly
disclose any change in your internal contro l over financial reporti ng that occurred during

Jeffrey K. Berg Communications Systems, Inc.  October 1, 2010 Page 3

the last fiscal quarter  that has materially affected, or is reasonabl y likely to materially
affect, your internal cont rol over financial reporting.

Definitive Proxy Statement filed on Sche dule 14A Incorporated by Reference

 Selecting Nominees for Election to the Board, page 4

6. In future filings, please disclose whether, and if so how, the Governance and Nominating
Committee considers diversity in identifying nominees for director.  Refer to Item
407(c)(2)(vi) of Regulation S-K.
 Role of the Compensation Committee and the Board, page 11

7. We note the Compensation Committee was advise d by an independent consulting firm in
connection with determining 2010 base sala ry compensation of the Named Executive
Officers and other executives.  In future filings, if applicable, please disclose whether the decision to engage the compensation c onsultant was made or recommended by
management.  Refer to Item 407(e )(3)(iii)(A) of Regulation S-K.
 Summary Compensation Table, page 14

8. We note you include two separate columns in the table related to incentive plan
compensation awarded to your named executi ve officers.  However, we note both
columns relate to cash incentive compensation.  Therefore, in future filings please report
cash incentive plan compensation payable to your named executive officers under one
column titled “Non-Equity Incentive Plan Comp ensation.”  Please refer to column (g) of
the Summary Compensation Table for smalle r reporting companies described in Item
402(n) of Regulation S-K.  To enhance disclo sure, please consider providing a narrative
description of the material factors necessary to an understanding of the information
disclosed in the Summary Compensation Table.   This may include a discussion of the
material terms of your short-term and long- term non-equity incentive plan compensation
awarded to named executive officers.  Re fer to Item 402(o) of Regulation S-K,
specifically sub-paragraph (5).
Director Compensation, page 16

9. In future filings, for awards of stock options , please disclose in the table the aggregate
grant date fair value computed in accordan ce with FASB ASC Topic 718.  Refer to Item
402(r)(2)(iv) of Regulation S-K.
10. We note your disclosure in footnote three to  the table that Mr. Sampson received cash
compensation of $130,000 for consulting services  in 2009.  We also note this is not
disclosed in the table.  Please provide suppl emental disclosure discussing the consulting
services provided to the Company by Mr. Sa mpson in 2009.  In future filings, please

Jeffrey K. Berg Communications Systems, Inc.  October 1, 2010 Page 4

include tabular disclosure of consulting fees earned from, or paid by you to a non-
employee member of your Board of Directors as “All Other Co mpensation” in the table.
Refer to Item 402(r)(2)(vii)(F) of Regulation S- K.  In addition, supplement the Director
Compensation table with a description of any consulting services provided to the
Company by a non-employee director.  Finally, f ile any consulting agreements as exhibits
pursuant to Item 601(b)(10) of  Regulation S-K.

Form 10-Q for the period ended June 30, 2010

Item 4:  Controls a nd Procedures, page 23

11. On page 23, you have provided disclosures re garding the Operating Effectiveness of
Accounting and Control Procedures.  Ho wever, you are required by Item 307 of
Regulation S-K to disclose the conclusions of your principal ex ecutive and principal
financial officers in clear and unqualified la nguage regarding the effectiveness of your
disclosure controls and procedures.  Please revise accordingly to disclose the conclusion
of your principal executive and principal financ ial officers, regarding the effectiveness of
your disclosure controls and procedures (as defined in Rule 13a-15 (e) or Rule 15d-15 (e)
under the Exchange Act) as of the end of th e period covered by your Form 10-Q for the
six months ended June 30, 2010.

12. You state that during the period covered by your report on Form 10-Q for the six months
ended June 30, 2010, there was no additional ch ange in your internal control over
financial reporting (as defined in Rule 13a-15(f) under the Exch ange Act) that materially
affected, or is reasonably likely to materially  affect, your internal control over financial
reporting.  Please refer to Item 308T(b) of Regul ation S-K and revise to clearly disclose
any change in your internal control over fi nancial reporting that o ccurred during the last
fiscal quarter  that has materially affected, or is reasonably likely to materially affect,
your internal control ove r financial reporting.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.     In connection with responding to our comme nt, please provide, in writing, a statement
from the company acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filings;

• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filings; and

Jeffrey K. Berg Communications Systems, Inc.  October 1, 2010 Page 5

• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

  You may contact Christine Adams, Staff Accountant, at (202) 551-3363, or Terry French,
Accountant Branch Chief, at (202) 551-3828 if you have questions regarding comments on the
financial statements and related matters.  You may contact Reid Hooper, Attorney-Adviser, at
(202) 551-3359, Robert Bartelmes, Senior Financial Analyst, at (202) 551-3354, or me, at (202)
551-3810 with any other questions.

Sincerely,

Larry Spirgel
        A s s i s t a n t  D i r e c t o r