I think I'm going to let him replace his FE bonuses, with:
Favored Enemy Alternative Class Feature: Swift Hunter (Ex):
Whenever the ranger would gain FE, he instead gains a cumulative +5ft increase in his base speeds, and +1d6 damage whenever he meets sneak attack requirements or skirmish requirements (target denied Dex or flat-footed, or ranger moves 10ft+), but no range limit (because FE has no range limit, and it will be less total damage). 1st level +5ft, +1d6, 5th level +10ft, +2d6, 10th level +15ft, +3d6, 15th level +20ft, +4d6, 20th level +25ft, +5d6.
EDIT: Applies only when in light/no armor, and carrying no more than a light load.
Badly worded, I know.
Is that balanced?