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COMMUNICATIONS SYSTEMS, INC.

10900 Red Circle Drive

Minnetonka, Minnesota 55343

October 19, 2010

VIA EDGAR  SEC
CORRESPONDENCE

Securities and Exchange
Commission

Washington, D.C.  20549

  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

Ladies and Gentlemen:

Communications
Systems, Inc. (the “Company”) has received your comment letter dated October 1,
2010 in regard to the above referenced filings.  The Company’s responses follow
the comments included in your letter.

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

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

Results of Operations,
page 19

SEC Comment

1.             We note your disclosure on page 21 that
international sales decreased 42% in your Transition Networks segment in 2009
due to the 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 Company has any long-term plans or commitments related to international
sales and marketing projects, this information should be discussed in your
management’s discussion and analysis section. In addressing the Company’s
prospective financial condition and operating performance, there are
circumstances, particularly regarding known material trends and uncertainties,
where forward-looking information is required to be disclosed. Please confirm
that you will provide such forward-looking disclosure in future filings.

Company
Response

In making the
statement “long-term projects are promising,” the Company was referring to
potential contracts and other projects that it has not been awarded but that it
is actively pursuing in European and other markets.  The Company has no long-term
plans or commitments related to these potential international sales and
marketing projects.

In future
filings, assuming the situation is similar, the Company would include language
substantially as follows:

“Although some
of the Company customers and potential customers have either delayed or
canceled international projects, the Company is continuing to invest in
international sales and marketing because it believes that, as economic
conditions improve, its long-term prospects for this area are promising.”

The Company
hereby confirms that it will provide appropriate information regarding material
trends and uncertainties pursuant to Regulation S-K, Item 303(a)(2)(ii), where
required, in future filings.

SEC Comment

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 strategic 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.

Company Response

The Company hereby confirms that in future filings, if
applicable, it will provide information related to various strategic
alternatives that management is considering if these alternatives have reached
the point where disclosure is appropriate and required.

Quarterly Operating Results,
page 45

SEC Comment

3.             We refer to the
footnote to your quarterly results. You state that during the first and third
quarters of fiscal 2008, you recognized approximately $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.

2

Company
Response

The footnote
under Item 8(b) was intended to provide a cross reference to a discussion of
the revenue recognition policy used by the Company’s JDL Technologies segment (“JDL”)
for one customer beginning in the Company’s 2006 fiscal year.  Under that
policy, because 90% of the amount earned for work performed by JDL under
contracts with the US Virgin Islands Department of Education (“VIDE”) was paid
by the federal government under its eRate program and all payments under the
eRate program required prior approval by the School and Libraries Division of
the Universal Services Administration (“SLD”), JDL did not recognize revenues
under VIDE contracts until approval was given by SLD.  Therefore, with respect
to work performed by JDL for VIDE in 2007, which necessarily involved the
expensing of costs in 2007, JDL did not recognize approximately $2 million in
revenues for this work until 2008 when SLD gave its approval.

The Company
discussed the effect on JDL’s revenues and gross margins resulting from the
application of its revenue recognition policy for VIDE contracts in the 10-K in
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations -- “Results of Operations” in its discussion of JDL’s results under
the captions “2009 Compared to 2008” and “2008 compared to 2007.”  Further, in
addition to the discussion of JDL’s revenue recognition policy for VIDE
contracts in Footnote 1 to the Notes to the Company’s Consolidated Financial
Statements, the Company discussed this policy in the MD&A presentation of “Critical
Accounting Policies” under the caption “Revenue Recognition.”

While the
Company acknowledges the footnote under Item 8(b) could have provided a more
precise cross-reference to JDL’s revenue recognition policy elsewhere in the
Form 10-K Report and, could have also included a cross reference to the
information about the application of this policy in 2007 and 2008 under “Results
of Operations” in its MD&A, the Company believes, that considered as a
whole, it provided adequate disclosure of how JDL’s revenue recognition policy
affected financial results.

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

SEC Comment

4.             We refer to
Management’s Report on Internal Control over Financial Reporting. You concluded
that, in the aggregate, no material weakness existed as of December 31, 2009
related to documentation and review of significant accounting judgments and
estimates, balance sheet account reconciliations, financial closing processes
and financial reporting processes at period ends. Please refer to Item
308T(a)(3) of Regulation S-K and revise your conclusion to clearly provide
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 financial reporting was
effective.

Company Response

In future annual reports on Form 10-K, the Company
will include substantially the following disclosure for the respective year:

3

“As a result of our
assessment, our management concluded that as of December 31, 2009, our internal
control over financial reporting is effective.”

We hereby confirm to the Commission that the statement
above is correct with respect to its review as of December 31, 2009, and
respectfully suggest that this confirmation is sufficient and that it is not
necessary that the Company amend its Form 10-K to provide this disclosure.

SEC Comment

5.             Further, we
refer to your disclosure regarding changes in internal control over financial
reporting. You state that during the period covered by your report on Form 10-K
for the year ended December 31, 2009, there was no additional change in your
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act) that materially affected, or is reasonably likely to
materially affect, your internal control over financial reporting. Please refer
to Item 308T(b) of Regulation S-K and revise to clearly disclose any change in
your internal control over financial reporting that occurred during the last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, your internal control over financial reporting.

Company Response

In future filings under Form 10-K, the Company will
include the following disclosure.

“There was no change in the Company’s internal
control over financial reporting that occurred during the Company’s most
recently completed fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.”

We hereby confirm to the Commission that the statement
above is correct for the quarter ended December 31, 2009, and respectfully
suggest that this confirmation is sufficient and that it is not necessary that
the Company amend its Form 10-K to provide this disclosure.

Definitive Proxy
Statement filed on Schedule 14A Incorporated by Reference Selecting

Nominees for Election to
the Board, page 4

SEC
Comment

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.

4

Company
Response

The Company hereby confirms that in future filings, it
will provide the information with respect to consideration of diversity in
identifying nominees for directors as required by Item 407(c)(2)(vi) of
Regulation S-K.

Role of the Compensation
Committee and the Board, page 11

SEC Comment

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

Company Response

The Company hereby represents that, if applicable in
future filings, in accordance with Item 407(e)(3)(iii)(A) of Regulation S-K,
the Company will disclose whether the decision to engage a compensation
consultant was made or recommended by management.

Summary Compensation Table,
page 14

SEC Comment

8.             We note you
include two separate columns in the table related to incentive plan
compensation awarded to your named executive 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 Compensation.”
Please refer to column (g) of the Summary Compensation Table for smaller
reporting companies described in Item 402(n) of Regulation S-K.  To enhance disclosure,
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.  Refer to Item 402(o) of Regulation S-K, specifically
sub-paragraph (5).

Company Response

In future filings, the Company will report all cash
incentive plan compensation payable to its named executive officers under a
single column titled “Non-Equity Incentive Plan Compensation.”  The Company
also notes your additional comments with respect to the disclosure and
providing a narrative description of the material factors necessary for the
understanding of information disclosed in the Summary Compensation Table and
will provide additional narrative information related to those factors in
future filings.

5

Director
Compensation, page 16

SEC Comment

9.             In future
filings, for awards of stock options, please disclose in the table the
aggregate grant date fair value computed in accordance with FASB ASC Topic 718.
Refer to Item 402(r)(2)(iv) of Regulation S-K.

Company Response

For stock option awards
made to Company directors in 2009, the aggregate grant date fair value computed
in accordance with FASB AFC Topic 718 (formerly FAS 123R) was identical to the
amount of compensation recognized by the Company in 2009 because all options
were granted and vested in the same year.  In future filings, the Company will
disclose in the table the aggregate grant date fair value computed in
accordance with FASB ASC Topic 718 and Item 402(r)(2)(iv) of Regulation S-K.

SEC Comment

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 supplemental disclosure discussing
the consulting services provided to the Company by Mr. Sampson in 2009. In future
filings, please 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
Compensation” 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, file any consulting agreements as exhibits pursuant to Item 601(b)(10)
of Regulation S-K.

Company Response

Curtis A.
Sampson founded the Company in 1969 and was its only Chairman and CEO until
June 2007.  At that time he stepped down as CEO but continued in the role of
Chairman of the Board.  The consulting agreement with Mr. Sampson is intended
to ensure that the Company would have access to the wealth of knowledge and
experience he developed over 37 years and compensate him for being available to
advise and support management with  respect to all aspects of the Company’s
business and operations.

During 2009, Mr.
Sampson consulted with the Company’s CEO, and on occasion with other officers
and directors, on a wide variety of matters, including the Company’s investment
strategy, overall Company strategic planning and specific acquisition
opportunities, the Company’s oversea operations and its foreign subsidiaries,
internal controls and internal audit matters, and succession planning.  Mr
Sampson also supported ongoing activities of the Compensation Committee,
Finance Committee, and Governance Committee.

In future filings
the Company will report Mr. Sampson’s consulting compensation under “All Other
Compensation” in the director compensation table required by Item
402(r)(2)(vii)(F) of Regulation S-K, along with disclosure of compensation paid
to other directors that does not fall under the other categories specified in
Item 402(r)(1), and, in each case, disclosure of this other compensation will
be accompanied by a description in a footnote of  what services were
performed.  Finally, we will file the agreement pertaining to Mr. Sampson’s
consulting services as an exhibit in the Company’s Form 10-Q report for the
quarter and nine months ending September 30, 2010.

6

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

Item 4:  Controls and
Procedures, page 23

SEC Comment

11.          On page 23,
you have provided disclosures regarding the Operating Effectiveness of
Accounting and Control Procedures. However, you are required by Item 307 of
Regulation S-K to disclose the conclusions of your principal executive and
principal financial officers in clear and unqualified language regarding the
effectiveness of your disclosure controls and