Something that Birth of the Federation did well, was diplomatic handling of borders.
When you built an outpost/starbase it would claim that sector and the adjacent sectors as well. If another empire places their own outpost/starbase, or a habitable system (two away from the outpost), it would put out its own claim on the adjacent sectors and turn them disputed. Neither side could use the sectors until the disputed claim was resolved. If you liked having a "Neutral Zone" between you and your neighbor, you could keep them disputed indefinitely. Or if you wanted the sectors, you could buy them in a deal, or give them a way in exchange for credits.
I would keep the current culture system the way it is, but change it to the following:
First if you have culture, you have visibility.
Second, if the region is not 66% or greater one Civilization (Excepting a city) the region becomes disputed.
Disputed territories are treated as if they belong to the other civ for military purposes, but may still be used by either civs as workable tiles. Workers may not be sent in to the territory unless there is an open orders agreement. If there are two cities in the two different civs that could work the tile, priority goes to the civ that has the higher culture value.
To end the disputed area situation, you talk to the other civ, and work a treaty. The treaty can last x turns, or it can last indefinitely. The treaty is automatically cancelled, and the disputed zone returns if either side declares war on the other. The treaty ceases to apply to the tile if either sides culture reaches the 66% plateau.
This would make some interesting three-civ border zones.
