When they do this to other airlines' customers, naturally the other airlines will follow suit.

In the last year, if I check in on DL and I have a separate ticket on AS, they would check it all the way to the final destination on my AS ticket thereby bypassing having to pay AS's fees. Now, with the airlines doing this, AS will see more revenue because DL will no longer check the bags on AS for you. You know how the airline industry works, once someone starts doing this then everyone will follow suit eventually.

This is the exact wording from DOT:

"In addition, airlines and ticket agents will be required to disclose baggage fees to consumers when they book a flight online. The first screen containing a fare quotation for a specific itinerary must show if there will be additional baggage fees, and inform consumers where they can go to see these fees. Information on baggage fees also must be included on all e-ticket confirmations, and for most trips the same baggage allowances and fees must apply throughout a passenger’s journey."

The triggering aspect that is causing the airlines to stop checking luggage for separate tickets is bolded. The DOT does not forbid interlining, the DOT still allow the airlines to continue to do what they have been doing for years. The only change is that the appropriate fees must be disclosed and remain consistent throughout the journey. So, I agree with you, the DOT is not telling the airlines how to handle our luggage and assumed that the airlines will do the right thing. Unforunately, they chose to come up with a new customer unfriendly scheme. Now, the DOT has another issue they have to come up with a modified regulation to correct the airlines' shrewd behavior. Why can't they just do the right thing, and by doing the right thing will not require any additional legwork as they have been doing the right thing for YEARS. Yet, AS decides to point fingers at DOT as the cause for the change, when in fact, the new DOT's policy will have little to no impact on how the airlines check luggage, which is a blatant lie on AS's part.

To avoid this mess, the DOT can remove the latter part of the new regulation, but continue to require the airlines to properly disclose the fee schedule for checked luggage. When the customer books his/her ticket they can review the baggage charges and decide if they accept and acknowledge that they will be expected to pay the relevant fees they can continue through the booking process. If they feel the fee is too high, they have a choice to not book the ticket or book with a different airline. So, if I book an AS ticket operated by DL, then AS SHOULD disclose/inform me of DL's baggage fees [which is $5 higher than AS I believe], so I don't show up at the airport thinking I will only pay $20 and be upset when the DL agent asks me for $25.