"The [regulations] are important at the present time because violations over social networks on the Internet have been observed in the past months," the sources said.
Citizens in Saudi Arabia already face stiff penalties for criticising the Prophet, early Muslim figures and clerics offline. According to Wahhabism, Saudi's strict version of Sunni law, perpetrators can receive the death penalty for counts of blasphemy.
Twitter CEO Dick Costolo says uptake of the microblogging platform is rapidly accelerating in Saudi Arabia. "Twitter is seeing some of its most torrid growth in the Middle East. Saudi Arabia is the fastest-growing country with a 3,000% growth last month," he told The Los Angeles Times this week.
There now 45.2 million Facebook users across the Arab world, as of June 2012 - a 50% annual increase and triple the number of users recorded in June 2010. Twitter now has two million active users in the Mena region, while LinkedIn boasts four million, according to the latest figures from the Arab Social Media Report.
Repentant blogger sparks national debate
The updated rules to punish online insults to Islam are in the works five months after the arrest of Saudi blogger Hamza Kashgari, whose tweets about the Prophet Mohammad were deemed as criminal.
Kashgari's case triggered debate in Saudi Arabia as to whether repentance could or should exempt offenders from receiving the death penalty, after expressing great remorse at his actions. Kashgari fled the kingdom in February, just days after his offending Twitter posts. He is now facing trial in Saudi Arabia after his arrest in Malaysia, en route to New Zealand.
Saudi Arabia analyst Jamal Khashoggi told Reuters that a new law warrants extensive public debate.
"I would rather have this law discussed by the public first," said Khashoggi. "It should not only be debated by the Shura, it should be debated in newspapers first because it can be misused. I don't want anything to affect my freedom and we don't want Saudi Arabia to be another Iran."
Saudi authorities may rely on crowd-sourced charges
Saudi Telecom Company (STC) refused to comment on how telcos would cooperate with authorities over blasphemy, threats and insults to Islam. Users can currently flag up harmful or inappropriate posts, but systems may be in place to track key words.
Dimitri Metaxas, Omnicom Media Group's Director for Digital in Mena suspects that authorities will rely on diligent social media users to report offending statements and allow social media websites to self-censor. He commented to AMEinfo.com about the complexity of enacting such laws across the social sphere.
"It would be very surprising to see a national government, such as Saudi's, implement wide scale litigation over comments made on social networking sites."
"My two main concerns here are jurisdiction and proving beyond reasonable doubt that the comments were made by the individual in question - where was this person when they tweeted? Did somebody hack their account? Furthermore, Facebook and Twitter are filled with offensive statements so going after all of them will be a very difficult process."






