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The performance of cloud radio access network (C-RAN) is limited by thefinite capacities of the backhaul links connecting the centralized processor(CP) with the base-stations (BSs), especially when the backhaul is implementedin a wireless medium. This paper proposes the use of wireless multicasttogether with BS caching, where the BSs pre-store contents of popular files, toaugment the backhaul of C-RAN. For a downlink C-RAN consisting of a singlecluster of BSs and wireless backhaul, this paper studies the optimal cache sizeallocation strategy among the BSs and the optimal multicast beamformingtransmission strategy at the CP such that the user's requested messages aredelivered from the CP to the BSs in the most efficient way. We first state amulticast backhaul rate expression based on a joint cache-channel codingscheme, which implies that larger cache sizes should be allocated to the BSswith weaker channels. We then formulate a two-timescale joint cache sizeallocation and beamforming design problem, where the cache is optimized offlinebased on the long-term channel statistical information, while the beamformer isdesigned during the file delivery phase based on the instantaneous channelstate information. By leveraging the sample approximation method and thealternating direction method of multipliers (ADMM), we develop efficientalgorithms for optimizing cache size allocation among the BSs, and quantify howmuch more cache should be allocated to the weaker BSs. We further consider thecase with multiple files having different popularities and show that it is ingeneral not optimal to entirely cache the most popular files first. Numericalresults show considerable performance improvement of the optimized cache sizeallocation scheme over the uniform allocation and other heuristic schemes.

Optimized Base-Station Cache Allocation for Cloud Radio Access Network with Multicast Backhaul