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Overlapping cell coverage areas come into play in all mobile cellular systems, especially in small-cell, high-capacity microcellular networks. Calls arising in the overlap area have access to channels of more than one base station and can select the appropriate base station to establish a connection. In this case the problems of base station and channel assignment arise jointly. We address the joint problem in a linear cellular network and prove that its solution reduces to that of a plain channel allocation problem in an equivalent linear network, after executing a sequential load balancing algorithm. The algorithm achieves optimal performance in terms of number of utilized channels and can serve as a benchmark policy for more general channel allocation procedures.