said by Intellivision Lives Web Site :

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Introduced in 1981, PlayCable: The All Game Channel enabled local cable operators to send Intellivision games over the wire with the TV signal. Subscribers used a special converter -- the PlayCable Adapter -- to download the games to play on their Intellivision Master Components. While reportedly popular in the areas in which it was available, PlayCable was discontinued in 1983.

The PlayCable Company was a joint venture of Mattel and General Instrument, the company that designed the Intellivision chip set. The units themselves were manufactured by General Instrument's Jerrold Division, which supplies cable TV converter boxes.

The PlayCable matched the original Intellivision Master Component in design. It plugged into the Master Component's cartridge slot and hooked up to the TV cable. Switching on the Intellivision brought up several pages of on-screen menus, displaying the available games. Twenty titles were available at a time, rotated monthly. The object code for these games was being continuously broadcast over the cable; when one was chosen, its code would be "tuned in" and fed into the PlayCable's memory (taking about 10 seconds). The Intellivision would then read the PlayCable's memory as if it were a game cartridge.

Several factors contributed to the systems demise:

The PlayCable Adapter contained insufficient memory to download the larger (8K and above) games introduced in 1983. The converter boxes would either have to be upgraded or the system limited to older games.
With the growing number of channels that subscribers were demanding ("I want my MTV!"), most cable operators felt reserving bandwidth for PlayCable wasn't worth it (especially considering the hardware investment needed to provide the service).
At least two people figured out that a PlayCable could make a dandy Intellivision development system. By hooking up a personal computer to a PlayCable and poking around by trial and error, they quickly decoded the EXEC software and started writing their own games. While these two were kept from competing with Mattel by hiring them to program the Intellivision Bump 'N' Jump arcade conversion, management was afraid PlayCable would make it too easy for small companies to get into the Intellivision-compatible business.
Subscribers rented the PlayCable Adapters from the cable companies. When the system was discontinued in 1983, the adapters had to be returned.

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Not quite sure how this can be interpreted as a threat...

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The Cable Company's content deliver network is privately owned and privately maintained. The Telco has no right to use private local infrastructure.

I still don't see the threat to the MSO, what I see is an untapped revenue source. Unless the various municipalities give up the franchise fee and the MSO's are compensated for building the local content delivery infrastructure.

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That irony is not lost on me either. Unless the cablecos block ports of throttle certain kinds of traffic (oh, they would never do something like that!) they may be developing a little leak in their revenue boat.

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XBox doesn't OWN the pipe, that's the whole point.

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