What is cross phase compatibility?

In spec. 04.90 or 24.90, it came up in 6.2 section.

6.2 Cross phase compatibility

6.2.1 Network only supports protocol version 1 of unstructured supplementary service data operations 

If a mobile initiated USSD request using protocol version 2 is rejected by the network, and the reason for the rejection is indicated either by the problem code "unrecognized operation" or a cause "Facility rejected", the MS shall assume that the network only supports protocol version 1 of USSD operations. The MS shall re-attempt the request by using the appropriate protocol version 1 USSD operation without a SS version indicator if the unstructured data entered by the user can be coded as an IA5 string.

6.2.2 Mobile station only supports protocol version 1 of unstructured supplementary service data operations

A MS supporting only protocol version 1 invokes an USSD request by sending a REGISTER message to the network containing a ProcessUnstructuredSsData invoke component without a SS version indicator. In this situation the network is not allowed to start a network initiated USSD operation. If the application requires such an operation for its proper function, the USSD operation sent by the MS shall be rejected by the application. The network shall terminate the transaction by sending a RELEASE COMPLETE message with cause "Facility rejected" (see GSM 04.08).

It is very easy story.

To sum-up, 

if the ME sends 7bit(GSM_7bit) coded USSD to NW. But it is rejected by the network with the reason "unrecognized operation" or "Facility rejected".

In this case, the ME should retry to send 8bit coded USSD to the network.