The National Broadcasting Co. assured Congress yesterday that its telecasts of the 1980 Olympic Games from Moscow will not become instruments of propaganda for the Soviet Union.

Robert E. Mulholland, president of the NBC television network, testified before the House Subcommittee on Communications that his company is paying more than $100 million for the rights to carry the Olympics.

He was saying that "NBC will control its entire production and technical operation" when his statement was interrupted by Rep. Loy Frey (R-Fla.), who asked, "Suppose there is a demonstration on human rights?"

Mulholland went on, "We have the complete, unfettered right to pick and choose from the various (camera) feeds, and to edit and organize what we want to show.

" . . . Of course, no one can guarantee that the Soviets will not 'pull the plug' as some critics have suggested they will. Obviously, they have the physical ability to do so.

"But considering the money, effort and prestige they are investing . . . we see no basis for assuming they would follow such a self-defeating course, with the whole world watching."

Mulholland continued. "There is nothing in or connected with our arrangements with the Soviet Union . . . which relates in any way or at any time to news coverage or inhibits or expands the activity of NBC News.

"We have made no concessions to journalistic integrity, nor will we make them."

Robert T. Howard, former president of the NBC television network, said that an aggregate of $9 million will be paid to Lothar Bock, a producer who has offices in Moscow and Munich, West Germany, to negotiate the rights to telecast the Olympics, to be a consultant to NBC for four years, and for three entertainment programs annually for five years.

Carl Lindemann of NBC Sports was asked, "Did the Soviets ever suggest that you carry programs reflecting favorably on Russia?"

"Yes," he admitted, but cited NBC having full control of programs.

Mulholland was asked, "Supposing the Soviets say in 1980, 'We don't want you focussing on demonstrations'?"

Mulholland replied, "If the dissidents are within range, our cameras will turn."

"Suppose someone stands in front of your camera (obscuring the demonstration)?"

"If he repeated it (making it clear it was intentional), we would report it to the proper authorities."

"Is that enough to 'pull the plug'?"

"You (meaning NBC itself) would have to make a judgment. If we were prevented from covering something, we'll protest, and report on the air that we are protesting."

"Suppose Taiwan is again excluded?" former NBC president Howard was asked. "Suppose Israel is excluded? Suppose the United States is excluded?"

"We discussed that. We have been assured by the International Olympic Committee that the Olympics will be opened to all athletes . . . from all nations."

"If the pressure becomes unbearable is NBC prepared to walk away from its investment?" Mulholland was asked.

"If it's unbearable and NBC's integrity is compromised, yes."

Frey injected the advice, "We don't want a lot of propaganda coming in (to the U.S.) . . . on how to take the (financial) bath."