diff --git a/SECURITY-CONFIG-CHANGES.org b/SECURITY-CONFIG-CHANGES.org
index 848d5cb..0e53f69 100644
--- a/SECURITY-CONFIG-CHANGES.org
+++ b/SECURITY-CONFIG-CHANGES.org
@@ -71,23 +71,52 @@ Eliminated hardcoded Icecast admin password from codebase.
   - ~*supported-formats*~ → ~(config-supported-formats *config*)~
   - ~*stream-base-url*~ → ~(config-stream-base-url *config*)~
 
+** Docker Security Fixes (~docker/docker-compose.yml~) - CRITICAL
+
+*** Port Bindings Secured
+
+All services now bind to localhost only (127.0.0.1) instead of 0.0.0.0:
+
+- *Icecast*: ~127.0.0.1:8000:8000~ - Use HAproxy to expose publicly
+- *Liquidsoap telnet*: ~127.0.0.1:1234:1234~ - Never expose to internet
+- *PostgreSQL*: ~127.0.0.1:5432:5432~ - Database access from host only
+
+This prevents external access to:
+- Liquidsoap telnet management interface (Problem 1)
+- Direct Icecast access without HAproxy (Problem 2)
+- PostgreSQL database port
+
+*** Passwords Externalized
+
+All Docker container passwords now use environment variables:
+
+#+BEGIN_SRC yaml
+environment:
+  - ICECAST_SOURCE_PASSWORD=${ICECAST_SOURCE_PASSWORD:-default}
+  - ICECAST_ADMIN_PASSWORD=${ICECAST_ADMIN_PASSWORD:-default}
+  - ICECAST_RELAY_PASSWORD=${ICECAST_RELAY_PASSWORD:-default}
+  - POSTGRES_PASSWORD=${POSTGRES_PASSWORD:-default}
+#+END_SRC
+
 * TODO Items Addressed
 
 ** DONE Problem 4: Templates no longer advertise default admin password
 ** DONE Server runtime configuration: All configuration parameterized and loaded from environment
+** DONE Problem 1: Liquidsoap telnet binding secured (localhost only)
+** DONE Problem 2: Icecast external binding secured (localhost only)
 ** TODO Problem 3: Database backend selection implemented (PostgreSQL support ready, migration needed)
 
 * Production Deployment Issues (From b612.asteroid.radio Test)
 
 ** Critical Security (Must fix before public launch)
 
-- [ ] *Problem 1*: Fix Liquidsoap telnet binding (currently exposed on external interface)
+- [X] *Problem 1*: Fix Liquidsoap telnet binding ✅ FIXED
   - Issue: ~telnet asteroid.radio 1234~ works from anywhere
-  - Fix: Bind to localhost only in Docker config
+  - Fix: Bind to ~127.0.0.1:1234:1234~ in docker-compose.yml
   
-- [ ] *Problem 2*: Fix Icecast external binding
+- [X] *Problem 2*: Fix Icecast external binding ✅ FIXED
   - Issue: Icecast binding to 0.0.0.0
-  - Fix: Bind to localhost only, use HAproxy to proxy
+  - Fix: Bind to ~127.0.0.1:8000:8000~, use HAproxy to proxy
   
 - [ ] *Problem 5*: Set up TLS/Let's Encrypt with HAproxy
 
diff --git a/config.template.env b/config.template.env
index 8ed030c..f852f1d 100644
--- a/config.template.env
+++ b/config.template.env
@@ -30,6 +30,11 @@ ASTEROID_STREAM_URL=http://localhost:8000
 ICECAST_ADMIN_USER=admin
 ICECAST_ADMIN_PASSWORD=CHANGE_THIS_PASSWORD
 
+# Additional Icecast passwords (used by Docker containers)
+# These are for Liquidsoap source connection and relay
+ICECAST_SOURCE_PASSWORD=CHANGE_THIS_PASSWORD
+ICECAST_RELAY_PASSWORD=CHANGE_THIS_PASSWORD
+
 # ============================================================================
 # DATABASE CONFIGURATION
 # ============================================================================
diff --git a/docker/docker-compose.yml b/docker/docker-compose.yml
index 5560750..193103e 100644
--- a/docker/docker-compose.yml
+++ b/docker/docker-compose.yml
@@ -3,13 +3,13 @@ services:
     image: infiniteproject/icecast:latest
     container_name: asteroid-icecast
     ports:
-      - "8000:8000"
+      - "127.0.0.1:8000:8000"  # Bind to localhost only - use HAproxy to expose publicly
     volumes:
       - ./icecast.xml:/etc/icecast.xml
     environment:
-      - ICECAST_SOURCE_PASSWORD=H1tn31EhsyLrfRmo
-      - ICECAST_ADMIN_PASSWORD=asteroid_admin_2024
-      - ICECAST_RELAY_PASSWORD=asteroid_relay_2024
+      - ICECAST_SOURCE_PASSWORD=${ICECAST_SOURCE_PASSWORD:-H1tn31EhsyLrfRmo}
+      - ICECAST_ADMIN_PASSWORD=${ICECAST_ADMIN_PASSWORD:-asteroid_admin_2024}
+      - ICECAST_RELAY_PASSWORD=${ICECAST_RELAY_PASSWORD:-asteroid_relay_2024}
     restart: unless-stopped
     networks:
       - asteroid-network
@@ -20,7 +20,7 @@ services:
       dockerfile: Dockerfile.liquidsoap
     container_name: asteroid-liquidsoap
     ports:
-      - "1234:1234"
+      - "127.0.0.1:1234:1234"  # Bind telnet to localhost only - SECURITY: Never expose to internet
     depends_on:
       - icecast
     volumes:
@@ -35,11 +35,11 @@ services:
     image: postgres:16-alpine
     container_name: asteroid-postgres
     environment:
-      POSTGRES_DB: asteroid
-      POSTGRES_USER: asteroid
-      POSTGRES_PASSWORD: asteroid_db_2025
+      POSTGRES_DB: ${POSTGRES_DB:-asteroid}
+      POSTGRES_USER: ${POSTGRES_USER:-asteroid}
+      POSTGRES_PASSWORD: ${POSTGRES_PASSWORD:-asteroid_db_2025}
     ports:
-      - "5432:5432"
+      - "127.0.0.1:5432:5432"  # Bind to localhost only
     volumes:
       - postgres-data:/var/lib/postgresql/data
       - ./init-db.sql:/docker-entrypoint-initdb.d/init-db.sql:ro