As long as I can remember, "rubberbanding" has been the way of the machine giving the computer an advantage when the player is leading in video games. For instance in Super Mario Kart, you are in the lead by half a lap when suddenly a computer character zooms past you as if you were connected by a rubber band. This is a form of dynamic game difficulty balancing.
Lately I have noticed an increase of using the term "rubberbanding" when talking about a type of "lag" where the player is returned to a place they were moment ago because of packet loss/server synchronization issues. First reference I could find was this log from a Ultima Online Expansion beta test from 1998.
Which leads me to my question: when/how was the term "rubberbanding" coined when talking about video games or computer technology in general?