diff --git a/Lib/xmlrpc/server.py b/Lib/xmlrpc/server.py
index f84176fc42d..60f992be050 100644
--- a/Lib/xmlrpc/server.py
+++ b/Lib/xmlrpc/server.py
@@ -159,7 +159,7 @@ class SimpleXMLRPCDispatcher:
     reason to instantiate this class directly.
     """
 
-    def __init__(self, allow_none, encoding):
+    def __init__(self, allow_none=False, encoding=None):
         self.funcs = {}
         self.instance = None
         self.allow_none = allow_none
diff --git a/Misc/NEWS b/Misc/NEWS
index cbf6d7547d9..aaf2b30abd6 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -15,6 +15,9 @@ Core and Builtins
 Library
 -------
 
+- Issue #2703: SimpleXMLRPCDispatcher.__init__: Provide default values for
+  new arguments introduced in 2.5.
+
 
 What's New in Python 3.1 alpha 2?
 =================================