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"Phase 2" probably refers to the ability for the dispatch operator to track the location of a caller using a cell phone to call 911. As you probabaly know, when calling 911 from a landline, your phone number and location are automatically displayed using ANI/ALI (Automatic Number Identification and Automatic Location Identification).
Originally, calls made from cell phones wouldn't give this information, so laws were passed requiring wireless carriers to provide this capability. Due the costs involved, they were allowed to implement it in two phases. In Phase 1, the system would give the number of the cell phone that was calling and tell the cell site that was used to make the call, identifying the general area. In Phase 2, more precise information, including the approximate coordinates of the caller (latitude/longitude) are provided, accurate to within 300' or so.
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