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I don't think Bunnie is looking to develop products that redistribute video.

If you've seen his previous NeTV project[1] he's looking to inject video overlays into the HDCP stream and let you do things like he described in his letter. His method of getting into the HDCP stream[2] via a MITM attack is probably what's running afoul of the government.

[1] https://www.adafruit.com/products/609

[2] http://www.bunniestudios.com/blog/?p=2117

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...and if he wants to offer that product he can license the stream and not hijack another company's product, right? If not, why not? Details please.

It's not hijacking this stream, it's allowing the legitimate user of the stream to modify it with an overlay while viewing it, at home for example.

While it's not something I agree with in principle, you do know that doing such a thing outside of the specific Four-Factor Fair Use test is an instance of Copyright Infringement? I'm not happy with the way the law is written, but I don't think this avenue is altruistic in the least.

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