This paper considers a one-dimensional model for a cellular network in which neighboring base stations may cooperatively transmit to users located between them. A distributed algorithm is given for deciding on the power allocation of each base station as well as on which users to serve either cooperatively or individually. The algorithm is proven to converge monotonically and the sum rate performance of different limit points is illustrated. Numerical results are presented that illustrate the performance of the algorithm in terms of sum rate, convergence speed and a fairness metric.