The concept of modulation frequency is shown to be a valuable insight into time-frequency transforms for audio coding. A two-dimensional transform, where the second dimension approximately decomposes the audio signal into modulation frequencies, is proposed. This transform, when applied to audio coding, provides high quality at low data rates and adapt gracefully to changes in available bandwidth. It is inherently scalable, meaning that channel conditions can be matched without the need for additional computation. Moreover, it is compact: in subjective tests our algorithm, coded at 32 kilobits/seconds/channel, outperformed MPEG-1 Layer 3 (MP3) coded at 56 kilobits/seconds/channel (both at 44.1 kHz). This potentially useful result motivates the need for further insight into the definition and analysis of modulation frequency. We thus define modulation frequency for a simple narrowband signal, propose a general bilinear framework for detection, and then propose a minimal set of conditions to extend this definition to broadband signals such as audio.