It's actually a somewhat misused term on the dispatchers' parts. These are the correct terms for E911 for cellular:
Phase 0 = You can call 911, but no location information is passed on.
Phase 1 = The location of the cell site is passed on to the dispatcher when you call 911 (not very helpful, but it was easy to implement).
Phase 2 = The location of most 911 callers is passed on to the dispatcher, within something like 300 feet. Most systems use a combination of GPS in the phones and triangulation using the cell sites.
Some callers cannot be located because of missing or outdated GPS information and you can't triangulate a signal if only one site "hears" the mobile.