The ubiquitous Ethernet has great potential to become an easy-to-install cost-effective backhaul solution for mobile small cells. However, limited Ethernet bandwidth is a practical constraint. Not only is small cell capacity limited by Ethernet bandwidth, but also the synchronization between cells can be substantially compromised. In this article we discuss small cells with Ethernet backhaul, focusing on two practical and important aspects: backhaul bandwidth requirements and tolerance to synchronization errors. The aspects become challenging in indoor small cell applications where the cells need to cooperatively suppress strong interference, producing a large amount of backhaul traffic. To address the challenges, we introduce a new distributed scheme of cooperative small cells over Ethernet. Exploiting a soft information combining technique, the scheme allows the signals of cooperative cells to be combined at aggregate switches along their backhaul paths, reducing backhaul traffic in Ethernet and distributing computational complexity. Our case study shows that the distributed scheme can reduce small cell backhaul traffic by 64 percent, compared to a conventional centralized approach. It is also tolerant to a large frequency error of ±4.6 ppm in a freerun state where synchronization is lost. Given the substantially reduced backhaul traffic, the new distributed scheme is able to support three times the cooperative small cells of the conventional centralized approach.