We propose that when all sources on the solar disc are taken into account, the S component at 10.7 cm wavelength is dominated by thermal free-free (bremsstrahlung) emission. It is not produced only in the vicinity of sunspots; more than 60~ of the total flux may be due to a widely-distributed emission associated with the hot complexes of activity. Using a model for the solar atmosphere based upon an assumption of weak (or vertical) magnetic fields, the spectrum of the S-component is calculated and its sensitivity to changes in the model parameters investigated. Variation of the thicknesses of the chromosphere, transition region and mixed zone cause only small changes in the S-component spectrum; there is a much stronger dependence upon the plasma density, particularly at the base of the corona. The behaviour of the S-component at 10.7 cm wavelength is examined in more detail. We find that the largest contribution to the 10.7 cm flux originates in the low corona, that structural changes affect it only slightly, but that it is strongly density-related. This dependence upon few quantities, together with its relative localization in the low corona, contributes to the usefulness of the 10.7 cm flux as an index of solar activity.