Interference cancelation (IC) can provide significant gains in wireless networks with strong interference, that arise, for example, in emerging femto- and picocellular deployments. This paper consider the problem of optimal downlink rate selection in networks where each mobile can perform IC on up to one interferer. When mobiles are capable of IC, it is argued that rate selection can play an analogous roles as power control by permitting a tradeoff between rates on the desired link with 'cancellability' on interfering links. A utility maximizing scheduler based on loopy belief propagation is presented that enables computationally-efficient local processing and low communication overhead. It is shown that the fixed points of the method are provably globally optimal for arbitrary (potentially non-convex) rate and utility functions. In addition, the result applies to an arbitrary networks where the interference is determined by a single dominant interferer, for which the IC problem is a special case. Simulations are presented in industry standard femtocellular network models.