This is a signal the kick returner gives by waving his extended arm, side to side. When he does this, the opposition must give him an uninterrupted opportunity to field the football. Once the player fields the ball, the spot on the field becomes the starting point for that offensive drive.
A major reason for the fair catch rule is to protect receivers, as their attention is focused on fielding the ball, which can make them vulnerable to devastating hits. This rule allows for the catcher-in instances where he won't have time to field the ball and avoid the hit-to simply catch the ball without interference.