Literary: Here begins the taunt-song. It begins with the declaration of the fallen position of Babylon. Where once Babylon was the oppressor, it is now fallen (and oppressed, though that is only implied). Where once the city was the height of civilization, it is no more, it is waste.
Symbolic: This song is clearly meant to be read at multiple levels. On one level, the historical Babylon has certainly fallen. In an eschatological reading. these are the events of the last days, and it is on those last days that the reign of true Israel reunited will be on the earth. On yet another level. this is the victory of the Messiah over the Accuser, over Satan. While Satan might reign on this earth in power and glory, he will also be fallen. and his apparent glory removed. He, like Babylon, will become a waste.
Variant: The Book of Mormon adds "And it shall come to pass in that day…" to the beginning of verse 4. This addition is grammatically necessitated by a change in verse 3, where "the day" became "that day." The general intent of the verses is the same, but they are different grammatically because of that change in wording in verse 3.