For competitive reasons, I would divide into two 7 team divisions and only play 5 in division games, skipping one based on past history / strength of schedule. Then you get 4 games against the other division and again schedule them on past history / strength of schedule, skipping 3.
That way the best teams all play each other no matter what. The weak teams (heres looking at you Indiana) get a chance to play the other weak teams and become bowl eligible.
No protected rivalries officially, but the conference commish can intervene in the schedule making process as needed.
Also throw in a rule where you can't skip the same team in your division more than 2 years in a row. Also throw in a rule where you must play every team in the conference every 4 or 5 years no matter what. Not sure if the math adds up, but that is what I would do if I were Jim Delaney.