By LINDA A. JOHNSON

Associated Press Writer

TRENTON, N.J. (AP) -- The music could die in New Jersey, and the silence could spread to other states.

There's a fight on here between business owners who play music in their restaurants and the agencies that collect royalties for music-makers.

If the restaurants win, the American Society of Composers, Authors and Publishers is threatening to stop issuing licenses in New Jersey. The long arm of the nation's largest music licensing agency would extend to bars, malls, nightclubs, concert halls -- even the telephone recordings you hear when a business puts you on hold.

``Is the public potentially going to be deprived of the music they like? Yes, and whose fault is that? It will be the restaurant owners' fault for refusing to pay for the music they use,'' said ASCAP lawyer I. Fred Koenigsberg.

ASCAP argues that taverns and restaurants pay only $1.58 a day on average for its music, plus lesser amounts to Broadcast Music Inc., or BMI, and the smaller Nashville-based SESAC.

Under a 45-year-old licensing system, restaurants and other businesses pay each of the three agencies blanket fees based on how many customers they can seat, whether the music is live or recorded, and other factors. There's no itemized bill; you don't get a break for playing more of one agency's music and less of another's.

Legislation awaiting Gov. Christie Whitman's signature would require each agency to provide detailed information, including a list of every composer and songs in its repertoire. Whitman has not yet decided if she'll sign, said spokesman Carl Golden.

The 65,000-member ASCAP said the new way of doing business would be so costly that it could not collect enough fees to make money for its artists.

Koenigsberg said a printed list of all ASCAP songs would be a stack of paper 5 feet high. He suggests requiring just one copy to be filed with the state.

ASCAP won a federal judge's permission last week to pull out of New Jersey if Whitman signs the bill. That would make it illegal for businesses to play the nearly 4 million songs within its domain -- and it would be very difficult to play any music while making sure not to include an ASCAP tune.

Since New Jersey's bill was introduced last June, similar ones have been submitted in 16 other state legislatures.

``Everybody's looking to New Jersey to see what happens,'' said ASCAP spokesman Bill Thomas.

Last month, a bill was introduced in Congress that would eliminate licensing fees nationwide for restaurants, bars and other establishments that turn on a radio as a source of music. ASCAP predicts that could cut in half the income of composers, endangering song-writing as a profession.

That's ironic at a time when President Clinton's administration is pressuring China and other countries to protect intellectual property rights, said Koenigsberg and Marvin L. Berenson, general counsel of BMI.

The three agencies each collect their fees under rate schedules approved by federal courts. Representatives of each agency visit non-paying restaurants and bars to make sure they're not playing music without paying the fee.

Restaurants would like to know which songs and artists are represented by each agency so they can shop for the least expensive package. And they don't want to pay at all for incidental background music.

``You don't know what company is entitled to the royalties,'' said New Brunswick restaurateur Frank Panico, who started the campaign for the New Jersey law after ASCAP successfully sued him because his piano player illegally played songs in its repertoire.

Panico was fined $5,500. His piano player now just plays chords to avoid copyrighted music.

The agencies say their rates are uniformly regulated by federal courts, which also mediate disputes. ASCAP's is overseen under a 1950 consent decree by a federal judge in New York City, who last week gave permission to pull out of New Jersey.

``The problem is (business owners) not understanding why they have to pay for music,'' said Marilyn Bergman, chairwoman of ASCAP's board of directors.

``It's property that comes from the factory of someone's mind that's just as real as a table or chair,'' said Bergman, a well-known songwriter who co-wrote the hit ``The Way We Were.''

AP-WS-03-26-95 1504EST

This material is copyrighted and may not be republished without permission of the originating newspaper or wire service. NewsHound is a service of the San Jose Mercury News. For more information call 1-800-818-NEWS.