  We propose a physical realization of the two-channel Kondo (2CK) effect,
where a dynamical defect in a metal has a unique ground state and twofold
degenerate excited states. In a wide range of parameters the interactions with
the electrons renormalize the excited double downward below the bare defect
ground state, thus stabilizing the 2CK fixed point. In addition to the Kondo
temperature T_K the three-state defect exhibits another low-energy scale,
associated with ground-to-excited-state transitions, which can be exponentially
smaller than T_K. Using the perturbative nonequilibrium renormalization group
we demonstrate explicitly that this can provide the long-sought explanation of
the sharp conductance spikes observed by Ralph and Buhrman in ultrasmall
metallic point contacts.
