  This paper studies transmission strategies for the downlink of a cloud radio
access network, in which the base stations are connected to a centralized
cloud-computing based processor with digital fronthaul or backhaul links. We
provide a system-level performance comparison of two fundamentally different
strategies, namely the data-sharing strategy and the compression strategy, that
differ in the way the fronthaul/backhaul is utilized. It is observed that the
performance of both strategies depends crucially on the available fronthaul or
backhaul capacity. When the fronthaul/backhaul capacity is low, the datasharing
strategy performs better, while under moderate-to-high fronthaul/backhaul
capacity, the compression strategy is superior. Using insights from such a
comparison, we propose a novel hybrid strategy, combining the data-sharing and
compression strategies, that allows for better control over the
fronthaul/backhaul capacity utilization. An optimization framework for the
hybrid strategy is proposed. Numerical evidence demonstrates the performance
gain of the hybrid strategy.
