  Cloud Radio Access Network (C-RAN) is a prominent architecture for 5G
wireless cellular system that is based on the centralization of baseband
processing for multiple distributed radio units (RUs) at a control unit (CU).
In this work, it is proposed to leverage the C-RAN architecture to enable the
implementation of direct localization of the position of mobile devices from
the received signals at distributed RUs. With ideal connections between the CU
and the RUs, direct localization is known to outperform traditional indirect
localization, whereby the location of a source is estimated from intermediary
parameters estimated at the RUs. However, in a C-RAN system with capacity
limited fronthaul links, the advantage of direct localization may be offset by
the distortion caused by the quantization of the received signal at the RUs. In
this paper, the performance of direct localization is studied by accounting for
the effect of fronthaul quantization with or without dithering. An approximate
Maximum Likelihood (ML) localization is developed. Then, the Cramer-Rao Bound
(CRB) on the squared position error (SPE) of direct localization with quantized
observations is derived. Finally, the performance of indirect localization and
direct localization with or without dithering is compared via numerical
results.
