Abstract-Femtocells are low-cost, user deployed base-stations that can alleviate indoor coverage problems. However as femtocell deployment density increases, inter-femtocell interference can severely limit their effectiveness. In this paper, we present a protocol for coordinated auto-configuration of femtocells in a UMTS environment. We use an iterated heuristic search (GRASP) to assign orthogonal CDMA spreading codes in the downlink to avoid interference between overlapping signals. The protocol is compared against a baseline of current practice on a range of simulated problems and shown to consistently provide greatly improved performance for data users, providing up to 480% of the average data rate the baseline provides on certain problems.