When my instructor says "Let's start from the knees" (or back to back), I look for a new instructor. I never, never, NEVER engage in this faggotry.
However, for an equal ground start position, I have always advocated face to face, right legs intertwined. This way, the position is absolutely equal and no one can just stand up without first either escaping or sacrificing their base.
It really doesn't surprise me that the mats you train on are devoid enough of students to never necessitate starting from the knees.
LOL, there are about 12 people who seriously grapple in town, that's just the way it is, it's fucking small, and the space is bigger than a lot of schools I've seen with lots of students. However, on the few occasions when there ARE too many people, some people just have to wait and sparring is in rotation, or it's pig-in-the-middle sparring where the winner goes on to the next match and the loser is off the mat.
At my old school, which had limited space and a lot of students, it was the same, you just waited for other people to finish, or (GASP) used your takedowns in a controlled manner to avoid collisions.
I know the space thing is the arguement always used, but I don't buy it. At the Judo club I used to go to, they'd start from the knees for newaza randori even though the place was fucking gigantic (although there were a fair number of students, I'm talking a gymnasium sized mat area). If the space is SO constrained that you can't start standing, you can't even do proper reversals anyway, so why bother cramming that many people on the mat at once?