  Two-tier femtocell networks-- comprising a conventional macrocellular network
plus embedded femtocell hotspots-- offer an economically viable solution to
achieving high cellular user capacity and improved coverage. With universal
frequency reuse and DS-CDMA transmission however, the ensuing cross-tier
cochannel interference (CCI) causes unacceptable outage probability. This paper
develops an uplink capacity analysis and interference avoidance strategy in
such a two-tier CDMA network. We evaluate a network-wide area spectral
efficiency metric called the \emph{operating contour (OC)} defined as the
feasible combinations of the average number of active macrocell users and
femtocell base stations (BS) per cell-site that satisfy a target outage
constraint. The capacity analysis provides an accurate characterization of the
uplink outage probability, accounting for power control, path-loss and
shadowing effects. Considering worst case CCI at a corner femtocell, results
reveal that interference avoidance through a time-hopped CDMA physical layer
and sectorized antennas allows about a 7x higher femtocell density, relative to
a split spectrum two-tier network with omnidirectional femtocell antennas. A
femtocell exclusion region and a tier selection based handoff policy offers
modest improvements in the OCs. These results provide guidelines for the design
of robust shared spectrum two-tier networks.
