A method and system are disclosed for avoiding bad frequency subsets in a frequency hopping cordless telephone system. A base station communicates with the handsets using frequencies selected from active frequency subsets. Bad frequency subsets are avoided by monitoring the air interface between the base station and handsets for errors in active frequency subsets. Errors in each active frequency subset are counted during a short-term interval using an associated short-term error counter and during a long-term interval using an associated long-term error counter. After each short-term interval, it is evaluated whether any of the short-term error counters has a value that is greater than a defined threshold. After each long-term interval, it is evaluated whether any of the long-term error counters has a value greater than an error count for a blocked frequency subset. A blocked frequency subset is then substituted for an active frequency subset if an associated short-term error counter is greater than the defined threshold or if a long-term error counter is greater than the error count for a blocked frequency subset.